Weber (NYSE:WEBR) stock fell more than than 13% Monday after being the latest casualty of an apparent short squeeze initiative past month. It appears the outdoor cooking company has come back down to earth after its recent short-squeeze-induced boom.
With the stock market in its current state, short squeezes have seen something of a resurgence. Illinois-based Weber has certainly seen the plus side of the phenomenon lately. Short interest in WEBR stock continues to trend above 50% with a float of 17.49 million shares, mostly held by institutions. This is largely what allowed the stock to surge as the bulls bought up the company last week.
WEBR has climbed 6% over the past month but was up more than 30% at one point, largely due to the efforts of short squeezers. Short squeezers buy up stocks in order to force a jump in share price. This puts pressure on short sellers to cut their losses and buy the now-elevated stock to return to their lender, concluding their short position while effectively raising the stock’s price even further as a result. Despite Weber’s recent gains, the company’s share price is still down more than 33% year-to-date and 38% over the last nine months.
However, today it appears the bears have gotten the better of the company.
WEBR Stock Drops Ahead of Bearish Earnings Call
Following WEBR’s short squeeze last week that saw its stock price skyrocket 15%, the bulls appear to have had enough. After logging last week’s tidy gains, it seems the short squeezers have sold their positions.
WEBR has been the subject of tremendous short interest since its disappointing second-quarter earnings report. The company announced a year-over-year decline in revenue of 7%. This accompanied a net loss for the company of $54.5 million representing a loss per share of $1.02, a far cry from the net income of $68.9 million reported last quarter.
Ahead of its June financial call, it seems the bears are ready to see the stock fall further.
On the date of publication, Shrey Dua did not hold (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.