In recent weeks, Faraday Future (NASDAQ:FFIE) is a company many investors have been watching. In particular, the view many speculators and traders have been taking with FFIE stock is that this is a stock that can squeeze in the near-term. And squeeze it has.
Looking at the chart of Faraday over the past month, it’s clear that there’s tremendous interest in this company. Trading around $2.35 per share one month ago, FFIE stock is now trading a hair shy of $7 apiece. That’s a rather impressive rebound in such short order, and one that’s made traders a whole bunch of money.
Previous squeezes in recent weeks saw FFIE stock rocket as much as 60% higher in a single day. That makes today’s rise of around 17% at the time of writing seem like child’s play. However, it’s clear that this stock is one that’s on the move, and mostly to the upside.
Let’s dive into whether this move can be sustained from here.
Is FFIE Stock a Buy on Short Squeeze Hopes?
Like other stocks that have been identified as short squeeze opportunities, Faraday has the majority of momentum to the buy side right now. In a bid to squeeze short sellers, options interest is high, as is buying interest in the company’s common stock. With a low price per share, FFIE stock is certainly attractive for the average investor looking to buy a lottery ticket on this play.
That said, as we’ve seen with so many other short squeeze stocks, these rallies fizzle out. Over the long-term, fundamentals matter. What that means is that while this run has been fun to watch, it will end at some point. As far as I can tell, there really aren’t any fundamental factors driving this increase outside of speculative interest.
For now, this is a stock that I’ll be monitoring from the perspective of how it moves on a day to day basis. However, I would expect that by year-end, the enthusiasm around Faraday is likely to dissipate. Thus, I’m happy to watch this stock’s volatile moves from the sidelines.
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.
