Short Interest Stocks To Watch This Week
Were you introduced to the stock market in 2020 and 2021 when meme stocks surged? At the time, some of the most well-known penny stocks, including AMC Entertainment and GameStop, surged to record levels. The “Fight Against The Hedgies” was waged by retail traders looking to take down Wall Street funds.
The trend didn’t last as long as some would have liked. But at the end of the day, it opened the eyes of traders to a phenomenon called a short squeeze. How do you find short-squeeze stocks? The first step is finding stocks with higher short interest, and in today’s article, we look at a few grabbing attention in the stock market this week.
What Is A Short Squeeze?
A short squeeze happens when investors who have shorted a stock (speculating that the price will drop) are forced to buy shares to cover their positions. This can drive stock prices even higher as short covering joins retail buying creating a snowball effect at times.
Shorting a stock involves borrowing shares from a broker and selling them in the open market. The expectation is that the price will drop. The investor can repurchase shares at a lower price and return the shares to the lender. They end up making a profit from the difference.
However, if the stock’s price unexpectedly rises, those who are shorting the stock will likely experience significant losses. These investors may be forced to repurchase shares in order to cut their losses and return the loan. In some cases, a short squeeze can be caused by company-specific news or developments that cause investors to change their outlook.
However, it can also be caused by broader market conditions. Examples include a bullish market or fewer shares available to borrow for shorting. The use of leverage can also enhance a short squeeze. It can actually amplify the impact of stock price movements on investors’ returns, like what was seen in GME and AMC stocks.
Short-Interest Penny Stocks To Watch
Troika Media (TRKA)
Shares of Troika Media have been on the list of penny stocks to watch over the last few weeks. The company came under serious pressure over the last year. The business solutions provider offers brands and experiences to connect consumers.
Troika’s dealings with Blue Torch Finance have come into focus recently. Last month, the two companies entered a further limited waiver of certain events of default under an original March 2022 finance agreement.
These “events of default” relate to Troika’s failure to satisfy specific covenants under that Agreement. There are currently “good faith” negotiations between the companies to amend the agreement and mitigate events of default. According to the amended filing, the Limited Waiver expires this month if it isn’t terminated sooner by Blue Torch. Considering the timing, it could be something helping to spark speculation in the stock market this week for TRKA stock.
Regarding short float percentages on TRKA, it doesn’t have the highest, but the figure has come to light. Right now, data from Fintel and TDAmeritrade show this sitting around 11%-12%.
Faraday Future Intelligent Electric Inc. (FFIE)
EV penny stocks have been heating up as larger companies like Tesla (NASDAQ: TSLA) and Lucid Group (NASDAQ: LCID) have pulled an about-face at the start of 2023. Faraday Future is a smaller EV upstart that has progressed forward in launching its flagship product, FF 91 Futurist.
If you’ve been following along with the updates on PennyStocks.com, FFIE stock is likely one you’re familiar with. Most recently, the company shook up its leadership, including the appointment of new Board members. The company also made headlines before the New Year after reporting that it plans to deliver its FF 91 EV before the end of April. It also inked a deal with the City of Huanggang Province in China to relocate its future FF China Headquarters to support the US-China “dual home market” and dual “DNA strategy.” What may have been more important is that the company also signed a shareholder agreement with FF Top to solidify it as a significant shareholder of the company.
Is FFIE on the list of short-squeeze stocks? According to data from Fintel and TDAmeritrade, the current short float percentage on the penny stock is roughly 21% and 34%, respectively.
Amyris Inc. (AMRS)
Another one of the penny stocks with higher short interest is Amyris Inc. The company recently presented at the JP Morgan Health Care Conference as investors focused on its Lab-to-Market technology platform. Amyris has been transitioning into more retail-centric verticals, including health & beauty, as well as flavors and fragrances. The company has said its ingredients are included in over 20,000 products from the world’s top brands.
In its last earnings update, Amyris showed Q3 revenue growth of 49% compared to last year’s quarter. The increase was attributed to record consumer revenue of $46.6 million. CEO John Melo also commented in Amyris’ third-quarter update that “Amyris outperformed key players in the beauty space according to the NielsenIQ 12 weeks trailing year-over-year growth rate of 7%…We have built the leading Lab-to-Market(TM) technology platform for synthetic biology and bio-manufacturing. After an extended period of rapid organic growth and acquisition activity, we are increasingly focused on brand integration, cash conversion efficiency, and cost optimization to achieve our profitability goals.”
On top of this, the market remains focused on the consumption of a strategic transaction. It will see Amyris give exclusive rights to supply two of its ingredients and valued at $500 million. One reason why it’s in focus right now is the timing of its closing. The company anticipates this happening this quarter. Regarding short interest, AMRS stock could be on the radar for some. TD and Fintel have this figure from 18% to 21%.
MicroVision Inc. (MVIS)
Like Faraday, MicroVision has exposure to the EV industry. In particular, the company focuses on automotive lidar and driver-assistance systems. A recent presentation at this year’s Consumer Electronics Show (CES) in Las Vegas helped shed some light on the company’s platform. Last year, MicroVision launched its MAVIN platform, achieved Class 1 laser safety compliance, and announced its intent to acquire Ibeo Automotive Systems for up to 15 million euros.
The acquisition, in particular, would combine MAVIN with Ibeo’s perception software into the MicroVision ASIC for automotive OEMs. Furthermore, the company explained in a related update that it also accelerates the combined company revenue streams from hardware and software products, with a forecast ranging between $8 to $15 million in 2023. The deal’s closing is also expected to happen during the first half of 2023.
Is MVIS a short-float penny stock to watch? Let’s look at the data. According to Fintel.IO and TDAmeritrade, the MVIS short float percentage is around 24%.