This season has highlighted Progenity (NASDAQ:PROG) as a top short squeeze play. The biotech company focuses on improving diagnostic and treatment options available to healthcare providers, in turn improving the quality of care available for patients. While this is an intriguing business, there are clearly other factors at play. PROG stock is rising 25% today, continuing its upward trend.
What’s Happening With PROG Stock
As previously noted, much of the coverage that PROG stock generates is the result of its status as popular short squeeze play.
In many recent weeks, Progenity has topped Fintel’s list of most likely short squeezes. Importantly, this popularity has helped it garner status as a stock beloved by retail investors.
All this buzz has served PROG stock well this week. It shot up this morning and is currently up 25% for the day despite some slight downticks from its earlier peak. Today’s gains have it in the green by more than 35% for the week. These numbers are good, but they pale in comparison to gains of 100% for the past month.
The Big Short (Squeeze)
For many investors, these numbers are impressive. However, an important part of the Progenity story is that the company has its fair share of critics. As InvestorPlace contributor Will Ashworth explained, Wall Street hasn’t been impressed with its financial performance this year. Ashworth says lackluster performance is a result of a corporate restructuring that closed the company’s testing labs.
It makes sense that the company pivoted away from its testing business in favor of focusing on research and development. However, while a logical step forward, it also makes sense that investors are worried about the short term as sales drop. Progenity will need to continue to reassure investors as it leans into a new business model.
So, in addition to investors who are betting on the long term for Progenity based on its turnaround, there are also retail investors drawn in by its short interest. They are looking to prove Wall Street wrong and cash out in the process.
There is one more thing to note, though. Today’s gains appear to be spurred by the fact that Progenity will be taking part in Piper Sandler’s 33rd Annual Virtual Healthcare Conference by way of a pre-recorded fireside chat. The event will take place next week on Nov. 22. Investors are hoping the company will share a meaningful update at the event.
The Bottom Line on Progenity
Investors have been keenly eyeing PROG stock as short play, and this trend is likely to continue. Today has seen investors across Reddit call for further gains, insisting it can reach the $5 mark if everyone buys and holds.
The patterns we are seeing today from PROG stock are nothing out of the ordinary for this season. Short interest is increasing, but as it does, Reddit investment communities who want to bet against Wall Street will be watching closely and acting accordingly.
For now PROG stock is worth watching, particularly ahead of the Nov. 22 event.
On the date of publication, Samuel O’Brient 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.
