Is a Giant Short Squeeze Brewing in Arrival (ARVL) Stock?

  • Arrival (NASDAQ:ARVL) stock has more than doubled on high short-squeeze interest.
  • The company’s short interest as a percentage of float is high, around 23%.
  • Given today’s momentum-driven rally, speculators appear enticed by this company at these levels.
ARVL stock - Is a Giant Short Squeeze Brewing in Arrival (ARVL) Stock?

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Growth stocks are certainly seeing an incredible amount of momentum in today’s session. A CPI report which showed inflation is moderating has investors taking a risk-on approach to equities. For companies like Arrival (NASDAQ:ARVL), this has culminated in impressive daily gains. That said, the more than 100% gain in ARVL stock is undoubtedly due to more than simply improved expectations of lower interest rates on the horizon.

Arrival appears to be picking up momentum as a potential short-squeeze opportunity. Given the company’s relatively high short interest as a percentage of float (nearly 23%), there are fundamental reasons why this makes sense. And seeing how retailers like Bed Bath & Beyond (NASDAQ:BBBY) and Party City (NYSE:PRTY) have run of late, perhaps there’s something to this rally.

Let’s dive into whether a giant short squeeze is really brewing with Arrival. Indeed, a double-up in a single day is certainly going to entice some momentum investors to this stock.

Is a Short Squeeze Brewing With ARVL Stock?

A hard-hit EV startup, Arrival’s fate has been similar to many of its peers in this sector. Simply put, 2022 was not a kind year to companies like Arrival. The stock remains down more than 90% over the past year, and that’s including today’s double. In other words, this is a stock that’s been shorted into the ground.

That said, with the short squeeze mania we saw in recent years, retail investors clearly have a playbook to chase momentum in times like these. When most market participants take a bullish view, and some start going after short sellers, it’s a perfect storm for near-term rallies like these.

Whether this rally can be sustained for any meaningful period of time remains to be seen. Indeed, this is a stock that remains well off its peak. However, Arrival is also a company that’s been shorted for a reason.

Perhaps this isn’t the end of this rally, by any stretch. But for those thinking about getting in after an explosive move like this, some pause may be warranted.

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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 Publishing Guidelines.

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