This week is possibly one of the most critical weeks of the year for all stocks, including penny stocks. While the sub-$5 niche tends to be more disconnected from broader industry trends, all eyes are on several significant events this week that could influence the market.
The July Federal Reserve meeting wraps up today with the Fed Announcement from Chair Jerome Powell during the mid-afternoon session. It will give investors a glimpse at what to expect regarding interest rates, quantitative tightening, and balance sheet runoff. Will we see a 75 basis point hike like most expect, or will the full 100 basis points become the new normal this month?
All will be revealed during the FOMC announcement on Wednesday. But this isn’t the only major market-moving event to consider. Second quarter GDP results are also coming out. Thursday, July 28th, will present an interesting situation that could signal an actual recession or reveal that the market was able to bypass the big “R” word for now.
Some, including the White House, have gone to some length to try and adjust the definition of a recession. But staunch opponents are sticking with the standard definition of a recession as two consecutive quarters of negative growth. Whatever the case might be and whatever meaning you might subscribe to, this week’s stock market news will likely influence how investors and traders approach things for the remainder of the year.
Penny Stocks To Buy Now
What are the best penny stocks to buy now? The ones that make you the most or most consistent amount of money in the stock market. Aside from the overreaching economic data, day traders are hunting for volatility. One of the most volatile niches as far as penny stocks are concerned involves stocks with high short interest, also known as short squeeze stocks. Since shorting involves heavy bearish bets by investors, it’s not uncommon to see these types of companies down in the dumps (at first). Remember that short sellers are short for a reason, but in the event of a squeeze, their bearishness can come to an abrupt end.
This article explores a handful of penny stocks with higher short interest and some of the recent events influencing the latest market trends.
- Faraday Future Intelligent Electric Inc. (FFIE)
- Reliance Global Group (RELI)
- Vinco Ventures Inc. (BBIG)
- Future Fintech Group Inc. (FTFT)
Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE)
If there’s one area of the stock market gaining widespread appeal lately, its electric vehicle stocks. Thanks to Tesla (NASDAQ: TSLA), Nio (NYSE: NIO), and many others, mass adoption has begun from the consumer side of the market. That has opened the door for many smaller EV companies to work for a piece of the pie.
Faraday Future bills itself as an “intelligent” electric mobility company, and for months, it has pushed back the production of its flagship FF 91 product. Earlier this year, the company explained that this quarter would be the platform’s official launch. However, some recent headlines have alluded to more stalling in production. Earlier this month, Faraday said it is negotiating with potential investors for a financing deal to capitalize and fund production activities through the end of the year.
While the market awaits a formal update, investors are taking a stance on FFIE stock. Some of these investors have placed bearish bets on the penny stock, and now the current short float percentages look like this:
- Fintel.IO FFIE Stock Short Float: 25.6%
- MarketWatch FFIE Stock Short Float: 26.3%
- TD Ameritrade FFIE Stock Short Float: 27.81%
With more than 25% short float on FFIE stock, retail traders have started closely following the potential of a short squeeze.
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Reliance Global Group (NASDAQ: RELI)
Shares of RELI stock are no stranger to massive short squeezes. Reliance saw a considerable spike from penny stock levels to highs of $10.49 at the end of 2021 and the beginning of 2022. The insurance company was a favored name among retail traders at the time. Since then, the appeal has seemingly faded, with shares of RELI stock steadily declining for most of the first half of the year.
Reliance specializes in personalized insurance plans and uses platforms like 5MiniuteInsure to offer efficient insurance solutions to consumers. Its recently launched RELI Exchange was designed for B2B use as an agency partner network. It provides competitive quotes from dozens of carriers and is intended to reduce back-office burden and unwanted paperwork with the insurance process.
In the July update, Reliance CEO Ezra Beyaman explained, “The RELI Exchange partner network, formerly known as Barra & Associates, is now generating more than $10 million in annualized premiums. Unlike a franchise model, we designed RELI Exchange with low barriers to entry and a compelling value proposition that we believe will help us attract many new agency partners—providing them with the tools to make their businesses better.”
While insurance stock may have started coming back into focus thanks to a value vs. growth approach to investing, RELI stock might be in the spotlight for other reasons. Those reasons have emphasized RELI stock short interest, which sits at:
- Fintel.IO RELI Stock Short Float: 9.08%
- MarketWatch RELI Stock Short Float: 4.33%
- TD Ameritrade RELI Stock Short Float: 7.17%
While it may not be the most heavily shorted penny stock, the discussion topic has recently emerged among retail traders.
Vinco Ventures Inc. (NASDAQ: BBIG)
The tech company Vinco Ventures is in the spotlight for several reasons. One of the reasons is hinged on a recent spinoff of its cryptocurrency company, Cryptyde Inc. (NASDAQ: TYDE). According to data from MarketWatch, TYDE stock short float percentage is 171.26%. Other outlets, including Fintel and TD, show that figure much lower at 14.95% and 3.74%, respectively.
Regardless, the attention on TYDE stock has spilled over into BBIG shares in the stock market today. As the leadership saga continued, Vinco’s shares dipped to fresh 52-week lows this week. Vinco has been going through potential hostile takeovers and key leadership shakeups. The company announced this week that Ted Farnsworth, recently named co-CEO of the company, had been terminated. Furthermore, Lisa King, previously the CEO of Vinco Ventures and the President of ZVV Media Partners, was also terminated. Vinco also ousted Chief Security Officer Erik Noble and Chairman of the Board Roderick Vanderbilt.
In an attempt to bring some clarity to the situation, current interim CEO John Colucci explained, “The Company believes it thwarted a hostile takeover attempt for no consideration by the Farnsworth Group , and we are in the process of stabilizing the Company to move forward and continue to achieve its goals that are in the best interest of the shareholders.”
While the uncertainty stemming from this recent development has brought a bearish tone to BBIG stock, it has also turned attention to the current short position. This sits at:
- Fintel.IO BBIG Stock Short Float: 20.83%
- MarketWatch BBIG Stock Short Float: 16.78%
- TD Ameritrade BBIG Stock Short Float: 21.24%
Future Fintech Group Inc. (NASDAQ: FTFT)
Cryptocurrency prices and related stocks have gone through the wringer during the first half of 2022. Future Fintech is one of the names following suit and trades below $1 a share. Not many updates have come from the company in recent weeks. However, Bitcoin prices have helped boost sentiment in July. That sentiment has trickled into crypto and blockchain stocks.
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In the case of Future Fintech, the company specializes in blockchain-based eCommerce and financial services. A recent update highlighted Future’s asset management company, Nice Talent Asset Management, became eligible to manage virtual assets in compliance with the Securities and Futures Commission of Hong Kong. “We believe that this strategic asset will further bolster NTAM’s ability to offer investment opportunities and best-in-class asset management and investment consulting services for institutional investors and high net worth investors in Hong Kong,” CEO Shanchun Huang said in a June update.
Is FTFT one of the short squeeze penny stocks to watch? Here’s what the numbers look like right now:
- Fintel.IO FTFT Stock Short Float: 7.74%
- MarketWatch FTFT Stock Short Float: 38.61%
- TD Ameritrade FTFT Stock Short Float: 10.06%
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