The surge in Getty Images (NYSE:GETY) stock is fueling rumors that the image licensing company may be a short squeeze candidate. Recently, Getty made its second trading debut — this time on a different exchange. Shares initially traded on the Nasdaq, but the company went private in 2008 after being acquired by a private equity firm. On July 25, however, GETY stock began trading again on the New York Stock Exchange via a special purpose acquisition company (SPAC) merger.
One month later, shares are up more than 200%. Although GETY stock began sliding downward last week, it is also currently up about 8% for the day. This climb is signaling a possible turnaround.
Let’s take a closer look at what’s going on with Getty Images and its shares.
The GETY Stock Short Thesis
At first glance, Getty’s 200% surge seems like a very successful trading debut. But as InvestorPlace contributor Dana Blankenhorn reports, this surge may be driven by the fact investors see GETY as a short squeeze opportunity. Blankenhorn notes:
“Anyone who borrowed GETY stock earlier in the week to sell it later has less stock available to buy than expected. For traders on Stocktwits, this means there may be a big opportunity to squeeze those shorts by buying GETY stock. The redemptions dropped the stock available for trade from , according to one trader on Stocktwits.”
Since GETY stock has continued rising since its NYSE debut, it’s clear interest in the stock remains high. But does that make it a clear short squeeze candidate? Not necessarily.
First, short selling data does not support the theory that GETY stock is a likely short squeeze candidate. According to data from Fintel, just 0.10% is being sold short. Additionally, investors have just 0.87 days to cover the short interest ratio, a fairly low number. So, it’s unsurprising that Getty is not one of Fintel’s top ranked short squeeze candidates. By contrast, Party City (NYSE:PRTY) boasts higher short metrics.
GETY stock isn’t generating the type of traction that usually indicates a short squeeze, either. As of this writing, Getty Images isn’t one of top mentions on r/WallStreetBets or on other similar stock forums for the past 24 hours. Although shares are attracting attention on Twitter (NYSE:TWTR), they aren’t generating the type of attention that warrants sounding the short squeeze alarm.
Short or Not?
There’s one other thing that investors should note when it comes to GETY stock; it also doesn’t have the typical characteristics of a meme stock. Sure, the company only recently returned to trading. But Getty isn’t a struggling name snubbed by Wall Street that contrarian investors may want to drive up in retaliation. In fact, Getty could have actual growth potential outside of short interest, according to InvestorPlace’s Louis Navellier:
“Short-squeeze status may have you thinking enthusiasm for this stock will be short-lived, but I wouldn’t jump to that conclusion. Getty is steady when it comes to earnings. In contrast to more speculative SPAC stocks, its $45.7 million in reported net income last year is not too shabby.”
All told, most of the data doesn’t support the idea that GETY stock is a likely short favorite. Short investors would be better served to focus their attention on the companies trending on r/WallStreetBets and the like.
On the date of publication, Samuel O’Brient 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.