Short Squeeze Penny Stocks To Buy [or avoid]
Penny stocks are mounting a comeback in the stock market this week. While broader indexes flip-flop, daily trends in cheap stocks capture retail traders’ attention. Call them Apes, dumb money, mom & pop investors, Main Street, etc. Non-institutional investors are taking to volatile trading strategies to beat the market.
The last few months have been tough for the overall market. But check back at some of our articles from this summer, and you will find explosive stocks to watch. Today we look at some of the stocks that are prone to swift price spikes in both directions. Short squeeze stocks have already amassed bearish bets as traders increase their short positions on stocks they believe will drop. But when these short sellers get squeezed out of their positions, the result in the market can be incredibly explosive.
Not all short squeeze stocks end up performing like AMC Entertainment (NYSE:AMC), or GameStop (NYSE:GME) did in 2021. However, that doesn’t mean there’s no potential for ‘smaller’ moves. By smaller, I mean hundreds of percentage points versus thousands. Look at Bed Bath & Beyond (NASDAQ:BBBY) over the several weeks. We discussed the company throughout July and early August, highlighting things like growing insider activity (3 Best Penny Stocks To Buy According To Insiders; 1 Bet Over $1.7 Million) and mounting short interest (Penny Stocks To Buy Now? 4 Short Squeeze Stocks To Watch). Eventually, BBBY stock exploded from under $5 to highs of $30.
Penny Stocks To Watch
Are all short-squeeze penny stocks bound for big moves? No, and there’s an even more significant risk when talking about volatility. But if a squeeze does trigger, the obvious potential reward can far exceed the risks when traded correctly. Here are four stocks with growing short interest. Will they be the next multi-bagger penny stocks to buy, or should you avoid them entirely? I’ll leave that up to you once you see the details.
- Opendoor Technologies (NASDAQ:OPEN)
- Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE)
- CleanSpark Inc. (NASDAQ:CLSK)
- FuboTV Inc. (NYSE:FUBO)
Opendoor Technologies (OPEN)
Chamath Palihapitiya’s track record of Special Purpose Acquisition Companies (SPACs) has been phenomenal for him, but for retail traders, it has left a long list of losses. Opendoor is one of these companies that followed the trend and has fallen from over $30 to under $5 since last year. Nevertheless, that hasn’t stopped heads from turning to the beaten-down stock.
Opendoor provides an eCommerce platform for residential real estate transactions. The heyday for a seller’s market may have slowed down a bit, but for OPEN stock, market momentum has not. Shares of the company have bounced from lows of nearly $4 to highs of over $4.80. Meanwhile, the focus on stocks with high short interest put this name on a few watch lists.
That’s because data from outlets including Fintel.IO and TDAmeritrade show the OPEN stock short float percentage sitting around 13.7%. This isn’t the highest short among the other companies on this list of penny stocks. But it has become a point of interest nonetheless. Opendoor also posted more robust earnings results last month and posted a smaller loss per share while slightly beating sales estimates for Q2.
Faraday Future Intelligent Electric Inc. (FFIE)
Another technology penny stock to watch with higher short interest is Faraday Future. The company specializes in “intelligent electric mobility.” The company’s focus has been on commercially launching its flagship FF91 platform, which had been pushed back multiple times throughout the year. Regardless, Faraday set the third quarter to ultimately become the launch period for the platform, and now onlookers wait patiently for confirmation.[Read more] 3 High Volume Penny Stocks To Watch Before Next Week
The company released a business update late last month discussing its production plans. CEO Dr. Carsten Breitfeld explained, “The ieFactory California team is producing high-quality production-intent vehicles for testing and validation…We noted earlier some challenges with supply chain issues which affected our FF 91 timeline. We have announced the successful raising of $52 million in convertible note commitments and continue financing discussions with multiple parties, but delays in our anticipated timing to close these potential transactions have also impacted our launch timing.”
As the market awaits yet another unknown launch date release, short interest has grown. As of this article, the FFIE stock short float sits around 16.8%. After such a long stretch of selling pressure, it will be interesting to see if the penny stock can turn things around heading into the rest of this month.
CleanSpark Inc. (CLSK)
Blockchain and Bitcoin stocks are gaining momentum in the stock market today. That’s thanks to pent-up momentum ahead of the Ethereum merge event anticipated for September 15th. The prices for leading cryptocurrencies, including BTC and ETH, have jumped at the end of the week in response, helping boost sentiment for related issuers.
CleanSpark has billed itself as “America’s Bitcoin Miner” and focused on developing a sustainable infrastructure for Bitcoin. This week the company announced an agreement with Mawson Infrastructure to purchase a turnkey bitcoin mining facility in Georgia. There’s also an agreement for CleanSpark to buy over 6,400 mining ASICs to add to its existing portfolio.
Matthew Schultz, CleanSpark’s executive chairman, commented, “We have strategically grown our operations in Georgia because of the state’s strong business ethic, competitive power rates, and an abundance of carbon-free energy, specifically nuclear.”
Is CLSK stock a short squeeze penny stock to watch? With a short float percentage just shy of 15%, it has been one of the names to know when hunting for short float stocks this week.
FuboTV Inc. (FUBO)
Sports entertainment streaming and gaming company, FuboTV has been mentioned throughout the week, specifically for some unusual activity in the options market. Earlier this week, we noted that there was heavy volume in the September 9th $3.50 and $4 Calls. This is a more short-term sentiment-based data point but was a point of interest nonetheless. While that same activity continues on Friday (with same-day expiration options), it has also extended into the options chain for the September 16th expiration.[Read more] Hot Penny Stocks To Buy For Under $0.99 This Week
This week the company announced the launch of its sportsbook betting product in New Jersey. Scott Butera, president of Fubo Gaming, explained, “As one of the largest and most established sports betting markets in the U.S., New Jersey will allow Fubo to analyze and efficiently develop the most engaging product features that are focused on driving streaming customers into wagering.”
Regarding FUBO stock’s short float, data from Fintel and TDAmeritrade show this between 25% and 28%.
Penny Stocks & Short Interest
When it comes to short-squeeze stocks, data is essential, and in many cases, it can be skewed depending on the outlet you get your information from. Therefore, it’s important to do research beyond identifying short interest alone. Today we looked at a handful of penny stocks with high short interest and increasing volume. Will they be on your watch list this month? Leave a comment.