Could Support.com Get Squeezed To The Moon?

Support.com, Inc. SPRT shares were trading higher Monday as a growing number of analysts and experts see the stock as the next potential massive short squeeze.

The Numbers: The company announced a reverse merger with Bitcoin BTC/USD miner Greenidge Generation Holdings back in March, and the merger is expected to be completed in the third quarter.

Related Link: 3 Short Squeeze Candidates In The Materials Sector

Benzinga first identified Support.com as a major short squeeze candidate back on July 14 when the stock was trading at around $4.27. Since that time, the stock has more than doubled, but some experts believe the short squeeze may be just getting started.

On Friday, S3 Partners analyst Ihor Dusaniwsky pointed out the huge short interest in Support.com and the ballooning fees short sellers are paying to maintain their positions.

Dusaniwsky said Support.com now has 6.44 million shares held short, or about 64.5% of its float. Short sellers are now down $32 million on their Support.com short bets so far in 2021, and Dusaniwsky said they are paying a 75.3% fee on their short bets.

ORTEX Analytics also identified Support.com as one of its eight top short squeeze candidates in the market back in July.

Short Sellers Fighting Back: Former hedge fund manager Will Meade said the latest S3 numbers suggest short sellers are fighting hard to keep Support.com from gaining more bullish momentum.

“Who ever is short this stock is putting up a good fight but at some point the tide will turn and you’ll get rolled over like a high school kid trying to tackle Derrick Henry,” Meade said.

“$SPRT has traded almost 25 million shares, which means the broker buy in for 65% short interest will be huge Monday premarket.”

Benzinga’s Take: Plenty of retail traders have made a killing targeting heavily shorted stocks like Support.com in 2021 and forcing short sellers to jump ship. However, successfully timing the entry and exit points in highly volatile short squeezes can be extremely difficult, even for professional traders.