Vinco Ventures is a prime example of a meme stock that traders love for its short interest and not its fundamentals or business. Since then the stock has tumbled down to below $2.00 now. BBIG did have a couple of minor squeezes, and hit an all-time high of over $12.00 at its peak. It rose to meme stock fame in 2021, when it was discovered to have one of the largest short interests on the market. Vinco Ventures is an American consumer goods and digital marketing company. ![]() Redbox has a short interest of over 209%, so this has the potential to squeeze higher at any time. On June 14th, shares of RDBX came full circle and fell by 34% during the session. Shares of Redbox surged by 15.68% on a day where nearly every constituent of the S&P 500 was well in the red. On June 13th, the S&P 500 fell by 3.88% and the NASDAQ fell by 4.68%. This came following the release of the May CPI report where inflation had hit a 40-year high. From June 9th to 10th, Redbox gained more than 60% during two of the most bearish sessions of the year. Interestingly enough, just days after this Tweet was sent out, Redbox saw a short squeeze. Redbox is in the midst of getting acquired by Chicken Soup for the Soul Entertainment. This means it’s the perfect stock for meme stock traders to rally around. Redbox is a video game and movie rental company that has long fallen out of favor with consumers. Source: Short-Squeeze Alerts Feed Top 10 Stocks That Could See a Short Squeeze Check out this chart that shows the latest squeezes from the first week of June: In fact, while GameStop and AMC have been trending downwards, other stocks have been squeezing higher. Can Stocks Squeeze in a Bear Market?Ībsolutely! Just because buying pressure is lower, it doesn’t mean stocks can’t squeeze. While these two stocks will forever remain linked to short squeezes, Reddit traders have managed to find some other targets to squeeze. Many of these traders hold onto these shares with diamond hands, awaiting the next short squeeze. They are why many traders look to a stock’s short interest before ever looking at its fundamentals. These two short squeezes were historic and have become the prototypes for social media squeezes.īoth were heavily influenced by users on Twitter and Reddit who had an agenda against hedge funds. Later that year in June, AMC shot up from $10.00 to just over $70.00 per share in a few days. In January of 2021, GameStop stock squeezed from about $5.00 to just below $500.00 per share in a matter of weeks. I don’t know about you but it seems like an eternity ago. If you can believe it, we are just 18 months out from the GameStop short squeeze and 12 months out from the AMC short squeeze. Although they may have benefited millions of smaller traders, coordinated squeezes set a dangerous precedent that skews the natural balance of an efficient market. It even led to the liquidation of a hedge fund called Melvin Capital, which averaged a return of 30% to its investors from 2014 to 2020. Coordinated short squeezes like we saw in 2021 led to tens of billions of dollars in losses for institutions. Which brings us to a controversial point with short squeezes: are coordinated squeezes bad? Well, the SEC will tell you it’s illegal. There was no social media coordination or effort to take down the hedge funds. Until 2021, short squeezes occurred rather organically in the markets. A short squeeze is neither good nor bad for the underlying stock. ![]() If you ask a trader who timed the squeeze, you’ll likely get a different answer. It depends who you ask! Obviously if you ask a short seller, they’ll tell you a short squeeze isn’t very enjoyable. You can imagine the cascading effect that takes place when buyers are buying shares, while at the same time more buying pressure is added when short sellers buy up shares as well. The short sellers need to be caught off guard and decide to cover their short positions. This final step is the key to the stock squeezing. So to sum this up: a short squeeze is a sudden surge in the price of a stock that is caused by short sellers covering their position by buying more shares of the stock. Finally, the short sellers need to decide to cover their position and exit their trade at a loss. Second, the stock needs to undergo some unexpected buying pressure that sends the price higher. First, the stock has to have a high short interest, which means there are a large number of short sellers who are shorting the stock. But do you know what a short squeeze actually is? A short squeeze occurs when very specific conditions are met by a stock. If you’ve followed the markets at all over the past couple of years, you’ve probably heard of traders looking for a stock to short squeeze.
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