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 go much higher on many occasions.
Fintel Data: Data from Fintel, which requires a subscription, provides a look at several of the top shorted stocks and data showing how likely a short squeeze is to occur.
Here’s a look at Fintel’s top five short squeeze candidates for the week of Jan. 24.
1. ShiftPixy: Gig economy and staffing solutions platform company ShiftPixy Inc (NASDAQ:PIXY) tops the short squeeze leaderboard for the week. Short interest is up 1,264% over the last month with 27.3% of the float now short. Fintel reports a borrow cost of 111% on PIXY shares.
ShiftPixy's stock is also on the REG SHO threshold, indicating there is significant failure to deliver on stock transactions.
2. Microbot Medial: Pre-clinical medical device company Microbot Medical Inc (NASDAQ:MBOT) climbs from fourth last week to second place. Short interest is up 928% in the last month with 14% of the float short. The cost to borrow is 16.4% on shares.
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3. Reliance Global Group: Insurance and real estate holding company Reliance Global Group Inc (NASDAQ:RELI) remains in third place for the second straight week. Short interest in the stock is up 909% in the last month. Fintel reports 28% of the float short and a cost to borrow of 315%. RELI also appears on the REG SHO list.
4. Insignia Systems: In-store and digital advertising solutions company Insignia Systems (NASDAQ:ISIG), which topped last week's leaderboard, ranks fourth this week. Short interest is up 2,358% in the last month. Fintel reports 58% of ISIG shares short, the highest on the leaderboard. The cost to borrow on shares is 470%, also the highest of the stocks on the leaderboard.
5. Digital World Acquisition: A SPAC bringing the new media company from former President Donald Trump rejoins the short squeeze leaderboard.
Digital World Acquisition Corp (NASDAQ:DWAC), which is bringing Trump Media & Technology Group public, ranks fifth on the list. Fintel reports 11.2% of the float short and a 103.3% cost to borrow on shares. Truth Social, a new social media platform, is rumored to be launching on Feb. 21, which has increased interest in the stock.
