Today, Camber Energy (NYSE:CEI) is a stock that’s rebounding, hard. Along with the broader market, CEI stock is seeing buying pressure taking this stock higher. However, unlike the major indices that are all up around 1.5% at the time of writing, Camber Energy has popped more than 75% at the time of writing.
This impressive increase comes on the heels of what has been a rather impressive drop in CEI stock. Over the past five days, CEI stock has still lost roughly half its value. And that’s including today’s 85% pop.
What’s the reason for this?
Well, Camber Energy has been the target of a short-seller. A short report released by Kerrisdale Capital insinuates there’s no reason this stock should have popped in the first place. The company points out that this is a highly leveraged stock, one with a going-concern for its core asset, and one that saw its accounting firm leave recently. These aren’t attributes high-quality companies tend to have.
That said, this rally suggests the market is more than brushing off these concerns. While yesterday’s selloff indicated investors weren’t placated by Camber Energy’s response to these allegations, today’s manic buying pressure suggests perhaps buyers needed a day to digest everything.
Let’s take a look at what else may be driving Camber Energy Higher today.
CEI Stock Higher on Retail Investor Enthusiasm
There’s two ways investors can look at damning short reports. On the one hand, these reports tend to highlight concerns investors may or may not have been aware of. These risks may be fully priced in, or not, and that really depends on how investors model out a given company.
In the case of CEI stock, this looks like a pure momentum play. Retail investors bid this stock higher on the way up. On the way down, panic selling brought inverse price action to this stock.
However, one of the key reasons behind Camber Energy’s previous rise was the company’s low float and high short interest. These factors remain and are even more pronounced than before. Accordingly, those looking for a short-squeeze candidate have an even better one today.
Accordingly, it appears the majority of today’s rally in CEI stock is momentum-driven via retail investors. Whether this rally will hold into tomorrow and next week remains to be seen. However, this is a stock that has a lot of room to make up to get back to the levels it was trading at last week.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
