Meme stocks such as GameStop Corp . (NYSE: NYSE:GME) and AMC Entertainment Holdings Inc (NYSE: AMC) showed massive strength this week as retail investors rotated their way into the same stocks that saw the historical short squeeze in 2021.
The threshold for a potential short squeeze is when the high short interest of a stock is 20% or above. Meaning if 20% or more of the outstanding shares of a stock are owned by short-sellers, the underlying stock can be on-ramped to a short squeeze.
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Short-sellers make profits when the price of the asset goes down, borrowing shares from their brokers in hopes to return the shares at a lower price. A short squeeze can occur when the price of an asset goes up, forcing the short-sellers to cover their positions, leading to more losses because buying shares increases the price of the stock.
A great example of this is the aforementioned short squeeze of GameStop. When it was revealed to retail investors 140% of the public float was sold short to hedge funds, it led to billions in losses.
According to Benzinga Pro, short-sellers own more than 20% of these stocks:
(Percentages are the shares in the float sold short.)
- Marketwise Inc (NASDAQ: MKTW) 44.45%
- Weber Inc (NYSE: WEBR) 44.42%
- Beyond Meat Inc (NASDAQ: NASDAQ:BYND) 40.61%
- Gogo Inc (NASDAQ: GOGO) 39.19%
- Dutch Bros Inc (NYSE: BROS) 33.91%
- Canoo Inc (NASDAQ: GOEV) 33.07%
- Fisker Inc (NYSE: FSR) 32.96%
- SmileDirectClub Inc (NASDAQ: SDC) 30.86%
- Hycroft Mining Holding Corporation (NASDAQ: HYMC) 30.16%
- Chewy Inc (NYSE: CHWY) 28.77%
- Corsair Gaming Inc (NASDAQ: CRSR) 28.55%
- Nikola Corp (NASDAQ: NKLA) 28.46%
- Virgin Galactic Holdings Inc (NYSE: SPCE) 25.14%
- Lordstown Motors Corp (NASDAQ: RIDE) 24.02%
- SoFi Technologies Inc (NASDAQ: SOFI) 23.27%
- Bed Bath & Beyond Inc (NASDAQ: BBBY) 21.81%
- AppHarvest Inc (NASDAQ: APPH) 20.92%
Read at Benzinga