8 Stocks With The Highest Short Percent Of Float

Traders often look at short interest to get a sense of how many people are bearish on a stock and how strong the possibility of a short squeeze is. But simply looking at the size of the outstanding short position for a stock might not necessarily be the best indicator of how volatile a stock can be if the shorts begin to cover.

In recent years, some of the most extreme short-term spikes in the stock market have come from stocks with low floats rather than stocks with the highest short interest. A stock’s float is the number of shares that trade freely on the market, and it typically excludes shares of stock held by institutions and inside investors.

Relate Link: 3 Short Squeeze Candidates In The Media Sector

Stocks with a high short percent of float represent stocks in which large quantities of the shares available to trade are being borrowed and shorted, creating a recipe for an explosive move higher if shorts are forced to cover.

“One of the factors that investors look at to characterize a security as crowded on the short side is Short Interest % of Float,” S3 Partners analyst Ihor Dusaniwsky said this week.

High-flying video game retailer GameStop Corp. GME was famously the most shorted stock in the entire U.S. market relative to its float prior to its massive short squeeze earlier this year.

Highest Short Percent Of Float Stocks: Here are the eight U.S. stocks with the highest short percent of float, according to S3 Partners (minimum $100 million in short interest):

1. Clover Health Investments Corp CLOV, 144.7% of float (Editor's note: On April 19, S3 followed up suggesting Clover’s actual short percent of float is 36.9% based on an “updated” float number from FactSet.)
2. PubMatic Inc PUBM, 50.2% of float.
3. Ontrak Inc OTRK, 43.4% of float.
4. Root Inc ROOT, 42.6% of float.
5. Blink Charging Co BLNK, 41.7% of float.
6. Nikola Corporation NKLA, 37% of float.
7. Academy Sports & Outdoors Inc ASO, 35.3% of float.
8. Esperion Therapeutics Inc ESPR, 34.7% of float.

Benzinga’s Take: Many of these stocks are already high-risk, high-reward stocks given the secular challenges their businesses are facing that attracted the short sellers in the first place. By ramping up the short percent of float of these stocks, it just adds rocket fuel to their potential volatility, making them extremely dangerous trades in either direction.