In the electric vehicle (EV) space, Faraday Future (NASDAQ:FFIE) has certainly been one of the more intriguing names to follow. Unfortunately for investors in this early-stage EV automaker, FFIE stock has been mostly in a downtrend over the past year.
In fact, in recent days, the company hit an all-time low of 88 cents per share. This morning, FFIE stock opened at the 90-cent level, and has since surged as high as $1.22 per share. This surge represents a 36% increase over yesterday’s close and meaningful appreciation for investors.
Interestingly, this move came on heavy volume, despite a relative lack of news from Faraday. Additionally, despite today’s impressive rise, FFIE stock still remains more than 90% below its 52-week high of $11.50 per share. Thus, it will take many more 36% daily gains to get this stock back to where it once was.
Let’s dive into some of the factors that may be behind today’s move in this stock.
What’s Going on With FFIE Stock?
The question many investors have with Faraday Future right now is whether this move is representative of a short squeeze or something more meaningful. Without any significant context, it appears investors are broadly jumping aboard this EV stock heavily today. And given Faraday’s extremely high volume (nearly three times the daily average at the time of writing), it’s likely that some big fish are playing with this small-cap stock today.
Reports are that short interest in FFIE stock is hovering around the 17% range, which is high to be sure. The reasons for this short interest are many. The company has been forced to raise capital and has had some management-related issues in recent months. These issues have resulted in a loss of investor confidence, which can be seen in Faraday’s stock chart.
Given the company’s relatively high short interest and low price per share, it’s likely that speculators and traders are playing this stock for a bounce. Risk-on sentiment is surging in the market today, making FFIE stock one of the more interesting bets for how to play this momentum. Of course, momentum can work in both directions. Accordingly, investors looking to play this stock should do so with caution right now.
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.