As a brief pressure unfolds on Wall Street, here’s who could be next
Traders are once again piling into stocks with high short interest, and several companies could be the next targets of the recent frenzy unfolding on Wall Street. As the new year begins, retailers are staging what could lead to a last-ditch effort to bring some of 2022’s battered meme stocks back from the grave. Bed Bath & Beyond’s shares rose nearly 69% on Wednesday, even as the company shared plans to lay off more employees and cut costs in a bid to revive and stave off a potential bankruptcy filing. Other meme stock stars followed suit, including GameStop and AMC Entertainment, which rose 7% and 21%, respectively. BBBY YTD-Berg After an 83% Plunge in 2022, Bed Bath & Bbeyond Stock Soars Shorting or shorting stocks is a common, though not exclusive, practice used by hedge funds. It consists of betting against a stock by borrowing and selling shares with the intention of later buying them back at a lower price, returning the borrowed shares and profiting from the difference. A short squeeze occurs when a stock price rises, forcing those shorting the stock to buy shares or cover their shorts to avoid losses. This usually drives prices up even further. Though short squeezes are forever part of market history, recently short squeezes have been associated with the meme stock craze that rocked Wall Street in 2021, when retailers banded together via social media to buy shares of stocks like AMC and GameStop to buy, causing maximum pain to short sellers. But after rallying in 2021, shares in Bed Bath & Beyond, AMC, and GameStop all fell in 2022, falling about 83%, 76%, and 50%, respectively. Now, as another Wall Street short squeeze unfolds, CNBC Pro used FactSet data to look for the next potential candidates. We looked for companies listed on the New York Stock Exchange and Nasdaq with a short interest as a percentage of the float of 25% or more and a market capitalization greater than $100 million. One stock ripe for an attack is crypto-focused bank Silvergate Capital, which plunged more than 88% in 2022 as digital coins and tokens plummeted and crypto exchange FTX imploded. Silvergate’s short holding percentage of free float recently stood at nearly 61%, the highest of any stock included on the screen. Shares are down about 22% back in 2023 on a string of analyst downgrades and after the company announced a 68% decline in total deposits from digital asset customers in the fourth quarter. Between December 15th and December 30th, short interest in the stock increased by $1.9 million. Popular online used-car dealership Carvana has sold 58% of its shares short. The stock plummeted 98% in 2022 as it grappled with a bleak outlook for used cars and concerns about a potential bankruptcy filing. CVNA 1Y Mountain Carvana shares plunged nearly 98% in 2022. Vaccine maker Novavax saw short-term interest rates rise by 5.9 million. Around 36% of the biotechnology company’s shares are being sold short. Shares have plunged nearly 93% over the past year, down 34% in just one day in December when a sale of up to $125 million in common stock and a $125 million offering in convertible debentures was proposed . In its third-quarter results released in November, the vaccine maker posted an unexpected loss and revised its full-year guidance to the lower end of its previous range. Beyond Meat and Weber are two other potential short-squeeze contenders that sold off heavily in 2022, shorting about 40% and 32.4% of their respective shares. Weber announced in mid-December a greed for a private takeover for $8.05 per share in an ongoing deal. Several electric vehicle and charging station stocks, including EVgo, Fisker, Lucid, Blink Charging, and Nikola, also appeared on the list. — CNBC’s Chris Hayes contributed coverage
https://www.cnbc.com/2023/01/12/as-a-short-squeeze-unfolds-on-wall-street-heres-who-could-be-next.html As a brief pressure unfolds on Wall Street, here’s who could be next
