OPINION: This article contains commentary which may reflect the author's opinion
New retail traders are looking for the next large move when it comes to potential short squeeze plays in 2021. Two high-profile examples of short squeezes this year were GameStop Corp. and AMC Entertainment Holdings.
Stocks that are heavily shorted can experience a short squeeze when they increase in value instead of falling. Those who are shorting shares can face a loss if they have to buy back those stocks at a higher price if they are looking to close out their position.
Squeezes can occur when short sellers are forced to buy back shares to cover their position, which has caused shares to rise significantly on many occasions.
Subscribers to Fintel can access a list of several of the top shorted stocks and data showing when a short squeeze is most likely to occur.
This week’s leaderboard includes two names from last week and is topped by a returning name from several weeks ago. Here is a look at Fintel’s top five short squeeze candidates for the week of December 27.
Biofrontera Inc., a biopharmaceutical company, leads the Fintel short squeeze leaderboard this week. BFRI shares are shorted by Fintel at three million, representing 47 percent of the company’s float.
Over the last month, short interest has increased by over 1,400 percent. The week’s highest cost of borrowing on shares was 180 percent.
Reliance Global Group
The insurance and real estate holding company Reliance Global Group moves up to second place from third last week on the leaderboard. Reliance Global Group has 34 percent of its total float short, similar to last week. It may be more difficult to short RELI shares this week since the cost of borrowing is 134 percent, up from last week’s 89 percent.
Petros Pharmaceuticals, a company focused on men’s health, is ranked third after leading the way for the last two weeks in a row. In the last month, short interest has increased by over 450 percent, showing 17 percent of the total float is short. Borrowing costs on shares have remained near a record high. PTPI shares’ cost of borrowing is 240 percent, down from 254 percent and 268 percent respectively over the past two weeks.
Many of the stock’s cost of borrowing figures are among the highest ever recorded. Over the last few weeks, institutional ownership of PTPI shares has declined, which could indicate bearish sentiment.
Qualigen Therapeutics, a biotechnology company, ranks fourth on the short squeeze leaderboard. In the last month, the number of short shares rose by 258 percent, according to Fintel. QLGN shares cost 17.3 percent to borrow.
Last week, shares rose slightly from under $1 to $1.50, after trading over $2.50 in November.
Inspira Technologies Oxy
The short squeeze leaderboard this week includes medical device company Inspira Technologies Oxy. During the past few weeks, short interest has been increasing in the name and is now 9.6 percent of the company’s float. According to Intel, the cost to borrow is 90 percent, a figure that may be high compared to the single digit percent of float short.
Stocks rose from $3 to $4.50 last week and traded over $6 early in December. The market capitalization of IINN is $28 million.