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Is FaZe Clan (FAZE) Stock the Next Big Short Squeeze?

  • FaZe Clan (FAZE) started this week off in the red.
  • But the recently public stock may have been marked as a short-squeeze favorite.
  • Its ranking among short candidates has recent shot up.
"FAZE stock" - Is FaZe Clan (FAZE) Stock the Next Big Short Squeeze?

Source: Piotr Swat / Shutterstock.com

Since its late-July initial public offering (IPO), FaZe Clan (NASDAQ:FAZE) has been hailed as a likely short-squeeze candidate. While FAZE stock has been volatile lately, data from short analytics platform Fintel indicates that it may be about to surge. It has shot to the top of the platform’s short-squeeze leadership board with an overall score of 99.78. FAZE is a newcomer to Fintel’s top rankings. The e-sports company hasn’t traded well since going public, but short investors have been keeping a close eye on it.

FAZE stock is a name that the r/WallStreetBets crowd follow closely. It’s a digital media brand whose target markets are the e-sports and gaming communities. That doesn’t mean it was embraced by short sellers, though. As InvestorPlace contributor Dana Blankenhorn reported, “Skepticism about SPACs, social media, and FaZe’s valuation caused initial reaction on the deal at Reddit to be negative. Before the SPAC became FAZE, the volume of short interest was rising.”

Blankenhorn also noted at the time that short interest data on the stock was coming soon. Since then, short interest in FAZE has remained high. Does that mean short-seller attitude torward it has shifted? Let’s take a closer look at Fintel’s metrics to determine how likely a squeeze is.

FAZE Stock: Short or Not?

Despite falling today in premarket trading, FAZE stock has been rising for most of the morning. Following a slight dip, it is still in the green, currently up more than 2% at the time of writing. Despite falling in early August as its post-IPO momentum cooled, FAZE is still up more than 28% for the month.

As noted, FaZe boasted the highest score on Fintel’s leadership board this week. “The closer to 100 a stock is, the more likely a short squeeze will happen,” notes InvestorPlace writer William White. At 99.78, FaZe’s score is quite high, especially for a stock that wasn’t in the top rankings last week.

Additionally, 99.38% of FAZE stock is being sold short, a statistic that should definitely keep short sellers on high alert. Its true investors have just 1.89 days to cover the short interest ratio, a fairly low number. That said, a short float percentage that close to 100 should overshadow all other numbers, especially when compared to that of the companies below FaZe on the list. TDH Holdings (NASDAQ:PETZ) and Singing Machine Company (NASDAQ:MICS) boast short percentages of only 27% and 24%, respectively.

For all the data supporting its high short potential, FAZE stock has yet to catch fire on social media. Data from ApeWisdom indicates that it has only received two mentions on Reddit in the past 24 hours. While nearby keywords included “squeeze” and “fintels,” the platform still does not have enough data to calculate a sentiment. The mention did not come from r/WallStreetBets.

That said, the data from Fintel is enough to support a short thesis for FAZE, making it a stock that investors should watch closely. Its new ranking on the platform may catch the eye of Reddit users quickly, particularly as the company has such a strong digital following. If it does, shares are likely to surge.

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.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/is-faze-clan-faze-stock-the-next-big-short-squeeze/.

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