12 Short Squeeze Candidates To Watch

One of the most powerful tradable market events is a short squeeze, so traders are always on the lookout for the next short squeeze candidate. S3 Partners analyst Ihor Dusaniwsky has just released a list of potential short squeeze stocks based on their high borrow rates.

A stock borrow fee is the percentage of a stock’s value that brokers charge short sellers to borrow the stock. If supply of shares to borrow gets low, borrow fees tend to rise.

“The stocks most susceptible to short squeezes are those with high stock borrow costs and large mark-to-market losses,” Dusaniwsky said.

When a stock’s borrow fees spike, it applies pressure to short sellers to choose between closing out their positions or letting fees eat into any potential gains.

Short Squeeze Candidates

Here’s a look at the 12 stocks with at least $50 million in short interest that have endured the largest short seller mark-to-market losses over the past two weeks, according to S3 Partners. Two-week losses are included for each stock:

• Mallinckrodt PLC MNK, -75.8%
• GameStop Corp. GME, -69.9%
• Paysign Inc PAYS, -37.5%
• Ballard Power Systems Inc BLDP, -31.2%
• Virgin Galactic Holdings Inc SPCE, -30.8%
• Novavax, Inc. NVAX, -28.3%
• Revolve Group LLC RVLV, -27.1%
• GTT Communications Inc GTT, -20.5%
• Aphria Inc APHA, -20.1%
• Accelerate Diagnostics Inc AXDX, -18.8%
• Inmode Ltd INMD, -15.8%
• Clovis Oncology Inc CLVS, -14%

Benzinga’s Take

Short squeezes are extremely unpredictable, and a rise in short seller losses is not a definitive indication that a squeeze is coming. However, the combination of high short interest and rising short seller losses makes these 12 stocks worthy of being at the top of any short squeeze watch list.

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