Even with a proposed ban on short-selling stocks circulating among regulators, short interest isn’t slowing down. On the contrary, short bets from U.S. investors just reached their highest level in over a year. Total short interest, which refers to the money that investors are spending to bet against specific equities, has continued to rise even as the S&P 500 has rallied among flashing indicators that the U.S. economy is heading toward a new bull market. Recently, positive market momentum has been helping even the most shorted stocks remain in the green. However, these are primarily unstable meme stocks with limited growth potential. As Bloomberg reports:
“The contrarian bets signal that some traders have concluded the S&P 500’s roughly 14% rally in 2023 will run out of steam, and they’re enduring steep losses as they wait for the market to turn in their favor. On paper, the positions are down about $101 billion this year, according to S3.”
It’s important to remember that short squeeze speculation can easily push a questionable company up, even as market conditions shift. Yesterday, Marathon Digital Holdings (NASDAQ:MARA) surged as investors pushed hard for a squeeze. Today, however, it is back to falling as retail traders turn their focus elsewhere. However, MARA doesn’t rank among the market’s most shorted stocks or even come close. Let’s take a closer look at the companies at the top of that list.
Top Five Most Shorted Stocks
These are the companies with the highest percentage of shares currently being sold short and the highest short interest as of today. These numbers indicate that they could be primed for the next big short squeeze.
- Carvana (NYSE:CVNA). This meme stock has seen an impressive surge lately, but it currently boasts a short interest of 48,048,285, with accounts for 57.97% of its float.
- Allogene Therapeutics (NASDAQ:ALLO): This struggling biotech company has a short interest of 40,031,632, accounting for more than 52% of its float.
- Beyond Meat (NASDAQ:BYND): Another unstable meme stock, this alternative meat producer has a short interest of 26,601,787, accounting for 52% of its float.
- EHang Holdings (NASDAQ:EH): This Chinese arial tech producer has a lower short interest of 8,634,257, but that still accounts for nearly 45% of its float.
- Big Lots (NYSE:BIG): This noted U.S. retailer features a higher short interest than EHang at 11,123,117. However, that only accounts for 41% of its float.
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.