- Tattooed Chef (TTCF): Plant-based food company Tattooed Chef is expecting slower sales growth and significant operating costs.
- Weber (WEBR): Weber has been negatively affected by the volatility of broader markets and its disappointing performance.
- Canoo (GOEV): Reddit’s WallStreetBets community helped Canoo thrive after a dip in the share price. However, the short investors who got burnt recognized this and have been pushing their influence on the company back upward.
- Arcimoto (FUV): One of the most inspiring companies to become prominent in recent years is Arcimoto, which designs and develops electric three-wheelers. Due to the EV craze in 2020, shares skyrocketed but then crashed soon after. Short investors are now circling the stock and are ready to pounce.
- Aterian (ATER): Aterian is a data analytics and machine learning company designed to provide insights into consumer products. A negative review from Culper Research, which suggested it had made bad acquisitions deals, is why it’s on this list.
- Beyond Meat (BYND): Beyond Meat, a plant-based food company with a mission to reduce animal suffering, has recently faced challenges in meeting its goals for profitability.
Short squeezes have proven to be a controversial topic on Wall Street since Redditors turned the concept on its head. A short squeeze is when several traders exit their positions in unison due to certain triggers, such as the stock moving higher. This causes the price to increase temporarily before settling back down. Therefore, investors are always on the lookout for potential short squeezes.
In 2021, Reddit investors targeted highly shorted stocks to punish hedge funds betting against them. Although it was an unconventional strategy, investors have minted triple-digit returns from the strategy. Therefore, there is merit to keeping a tab on these investments.
|Tattooed Chef, Inc.
|Beyond Meat, Inc.
Potential Short Squeezes: Tattooed Chef (TTCF)
Short Interest % Float: 30.23%
The founders of Tattooed Chef (NASDAQ:TTCF) wanted to ensure that every product they offered would be as good as possible without compromising on taste or price. This led them to create vegan burgers and vegan ice cream.
The company debuted through a reverse merger with a blank check company in 2020. However, the company’s fourth-quarter profit recently dropped, revealing slower than expected sales growth and a significant increase in operating costs. When most growth stocks are suffering, the report was the last thing Tattooed Chef needed.
Short traders have been betting against the stock. Hence, Reddit might put its weight behind this stock in the hopes of cashing in and sending a message to Wall Street yet again.
Short Interest % Float: 27.30%
The company has also introduced an electric grill, which uses electricity to grill food instead of charcoal or gas. You can control the electric grill remotely through the Weber app or Wi-Fi connection, making it easier to cook food at home without using traditional fuels like charcoal and gas.
This company went public in August 2021, and its stock price was $14 per share. However, much like many IPOs, Weber has not done too well during the last few months. You can chalk this up to many factors, but the volatility of the broader markets is the main factor.
Traders who shorted the IPO found themselves to be in a good position. They are not likely to get smoked by Weber Corp. because it hasn’t reached its expected success yet. However, its shares are heavily shorted, making it one of the biggest potential short squeezes out there.
Potential Short Squeezes: Canoo (GOEV)
Short Interest % Float: 29.69%
The last two years have seen many electric vehicle startups emerge through the SPAC route. However, not every company has managed to maintain the initial excitement. For example, Canoo (NASDAQ:GOEV) went public in December 2020 through a SPAC merger at $22.82 per share.
However, despite making more products and having them produced in the U.S., the company has trouble. You can chalk that down to the general investment environment at the moment. Interest rates are rising, and with geopolitical tensions rife, investors are losing their appetite for unprofitable high-growth companies.
Short investors piled into the stock, but then Reddit’s popular WallStreetBets community got into the mix, leading to a spike in the share price. It burned the short investors. However, they have regrouped, pushing the short interest upward once again. Considering its history, you cannot afford to ignore this company when discussing potential short squeezes.
Short Interest % Float: 46.47%
Electric vehicles are looking like they will take over the market soon. They are becoming more affordable, reliable and environmentally friendly.
The shift to electric vehicles is one of the most significant changes in transportation history. The change in how we think about cars will have a huge impact on society and our economy.
It is important to remember various ways to attack this concept. One of the unique companies to emerge over recent years is Arcimoto (NASDAQ:FUV), which designs and develops electric three-wheelers. Due to the EV craze, shares rose by triple digits, but then promptly had a selloff.
As you probably know, the stock has been significantly down recently. It is now trading at historic lows and has become a great investment for short-sellers who happened to anticipate the drop promptly. However, the high short interest makes it an ideal candidate for a short squeeze.
Potential Short Squeezes: Aterian (ATER)
Short Interest % Float: 16.29%
Aterian (NASDAQ:ATER) is a data analytics and machine learning company that provides insights into consumer products. It helps companies make sense of their data and find out what they need to do next.
Data analytics is a rapidly growing field with uses in different industries such as marketing, human resources, and finance. The global market for data analytics software is expected to reach over $68 billion by 2025, with a CAGR of 30%.
Since the company is involved in several exciting segments, it might surprise investors that shares are highly shorted. However, one of the biggest reasons is a poor review from Culper Research, which suggested it had made bad acquisitions deals. Such reports can have a massive influence on the short ratio, as we can see here.
Beyond Meat (BYND)
Short Interest % Float: 39.74%
Beyond Meat (NASDAQ:BYND) creates plant-based meat alternatives clinically proven to have the same amount of good fats, protein and calories as traditional meat. It is a vegan, organic and gluten-free alternative to conventional meats.
Its products include Beyond Sausage, Beyond Burger and Beyond Chicken Strips. Beyond Meat is a company that is revolutionizing the meat industry. Its vegan burgers and sausages are now available in over 3,000 grocery stores across the U.S. and Canada.
The company’s weak fundamentals and poor outlook have made it an ideal target for short investors. However, a targeted buying campaign could trigger a squeeze, so this one should be on your radar.
On the publication date, Faizan Farooque 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.