Potential short squeeze plays gained steam in 2021, with new retail traders looking for the next huge move.
A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.
A squeeze can occur when short sellers are forced into buying to cover their position, which can cause shares to move up higher on many occasions.
Fintel Data, which requires a subscription, provides a look at several of the top shorted stocks and how likely a short squeeze is to occur. Here’s a look at the top five short squeeze candidates for the week of July 18.
Singing Machine Company: Karaoke audio equipment company The Singing Machine Company (NASDAQ:MICS) tops the short squeeze leaderboard for the second straight week. Shares have risen from $5.50 to $9.82 in the last month, hitting a new 52-week high last week. Fintel data shows 30.2% of the company’s float short, significantly down from last week’s reported 80.3%. The borrow fee is 108.3%, slightly higher than last week’s 106.5%.
Revlon Inc: Cosmetics company Revlon Inc (NYSE:REV) continues to rank high on the short squeeze leaderboard. The company, which declared bankruptcy in June, moves up from third place in last week’s report to second place to start the week. Fintel data shows 72.8% of the float short, up from last week’s reported 53.9%. The cost to borrow is a reported 600.4% on Fintel, one of the highest figures on record, but down from last week’s 894.0%.
Blue Hat Interactive: Augmented reality company Blue Hat Interactive Entertainment (NASDAQ:BHAT) ranks third on the list for the week. Fintel data shows 40.6% of the company’s float short and a cost to borrow of 472.2%.
HTG Molecular Diagnostics: Life sciences company HTG Molecular Diagnostics (NASDAQ:HTGM) ranks fourth on the list and is one of the biggest movers on the short squeeze leaderboard. The company moved up 499 spots to come in fourth place for the week. Fintel data shows 45.1% of the float short and a cost to borrow of 222.2%.
Chicken Soup for the Soul Entertainment: Video-on-demand company Chicken Soup for the Soul Entertainment (NASDAQ:CSSE) ranks at fifth place for the week, rejoining the short squeeze leaderboard. Data shows 21.0% of the company’s float short and a cost to borrow of 68.3%
Other Stocks to Watch: Virgin Orbit Holdings (NASDAQ:VORB) ranks sixth on the leaderboard, narrowly missing the top five. The stock moved up 38 positions. The company has 16.2% of the float short and a cost to borrow of 126.3%.
Avalo Therapeutics (NASDAQ:AVTX) ranks eights for the week, rising 1,189 positions. Data shows 23.9% of the float short and a cost to borrow of 5.9%.