One of the most explosive winners in today’s market is tech company Aterian (NASDAQ:ATER), as retail investors focus in on a potential short squeeze. Currently, ATER stock has surged more than 60% on yet another winning day in the stock market. Most major indices have shot higher, led by strong price action in the Nasdaq. Indeed, growth investors are doing their thing once again, with a surge in valuations driving most of the growth we’re seeing right now.
Interestingly, some of the similar forces we saw play out in Q1 of last year are taking place again. Speculators are back to speculating on meme stocks. And while Aterian may not fit the exact definition of a meme stock, it’s certainly one that’s on the radar of retail investors.
Notably, this company has also made some key moves in its C-suite. An executive shuffle, which saw Cynthia Williams join Aterian’s board of directors, has investors excited. Aterian is seemingly making all the right moves, and attracting significant interest, for good reason.
Let’s dive into what’s behind today’s move in Aterian a bit deeper.
Why Is ATER Stock Surging Today?
While there’s likely some overhang from last week’s announced executive addition, it appears there’s much more to this rally than some front office maneuvering. Rather, retail investors are likely responsible for much of this move, which has been very dramatic today.
Shares of Aterian are attractive to retail speculators for a few reasons. First, this company’s share price, which sits around $3.75 per share at the time of writing, makes options contracts cheap. For those looking to play a near-term spike, these are the kinds of stocks investors may want to play around with.
Secondly, Aterian has a very high short interest ratio relative to its peers. According to Fintel, Aterian’s short interest as a percentage of its float sits at around 32%. Additionally, off-exchange short volume sits at more than 63%, a very high level for any given stock.
Thus, there’s the recipe for a short squeeze brewing with this stock. Today, retail investors are jumping aboard the speculative train, driving shares of this small-cap stock higher. Whether this move continues remains to be seen. However, this is a stock many investors now have on their radar, and for good reason.
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.