Short Squeeze Could Be Driving Impinj's Rebound

IMPINJ Inc PI shares are up 8.3 percent Friday after the company reported Q1 revenue and earnings beats on Thursday. Impinj shares are reacting positively to the beat even though the company’s Q2 guidance came up well short of market expectations.

Impinj’s post-earnings trading action has been rather strange, suggesting a short squeeze could be in play.

Impinj shares initially plunged 12 percent in the guidance miss in Thursday’s after-hours session. However, shares quickly recovered back into positive territory on Friday morning. The stock is so heavily shorted that it may now be meeting buying pressure following any significant dip.

According to shortsqueeze.com, Impinj currently has a staggering short percent of float of 45.4 percent. The stock has more than 6.5 million shares held short with 15.1 days to cover.

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As Impinj shares have climbed 9.7 percent in 2017, short interest has skyrocketed 206.6 percent. The company was one of the hottest tech IPOs of 2016. The relentless short selling since its IPO may have triggered a wave of short covering following its most recent earnings report.

Throughout the year, Impinj has been the subject of buyout rumors in the market, but a deal hasn't been announced. Its surging valuation has made Impinj one of the most popular stocks to short in recent weeks. As of late April, FIS Astec Analytics reported that more than 99 percent of the stock’s available shares were being borrowed.

Morgan Stanley is certainly not convinced of the Impinj bear case. Back in February, the frm initiated coverage of Impinj with an Overweight rating.