After surging early last week, Nikola (NASDAQ:NKLA) stock is back to its typical pattern of plunging steadily downward.
The electric vehicle (EV) startup is known for electric trucks, but it is coming off what can only be described as a roller-coaster week. It ended July with the announcement that it had secured an order for 13 trucks from J.B. Hunt Transport Services (NASDAQ:JBHT). This news sent shares up, leading to speculation that it could be the next meme stock sensation.
However, NKLA stock was not destined to keep rising. A few days later, CEO Michael Lohscheller announced that he would be stepping down due to “family health concerns.” Since then, shares have been trending downward, leading to NKLA stock experiencing its worst trading day in three years. As a result, short-sellers have been ramping up bets. There are currently hardly any Nikola shares available to short.
What’s Happening With NKLA Stock
Today’s price action further supports the case for shorting NKLA stock. As of this writing, shares are down 10% for the day, and their current trajectory doesn’t suggest that a turnaround is likely. Not that there’s any reason to expect a rally. Given the onslaught of bad news that has plagued Nikola recently, it’s a wonder that the stock hasn’t fallen more than it has. But what isn’t surprising is that investors are rushing to bet against it.
Data from Fintel indicates that as of this morning, the amount of shares of NKLA stock available to short has been dwindling. This has changed rapidly. Two hours ago, Fintel’s data showed zero shares available at the site’s prime brokerage data source. Less than an hour ago, there were 45,000 shares available. The stock receives a short squeeze score of 74 out of 100. While that isn’t as high as it could be, short interest still accounts for more than 23% of the stock’s float.
Retail investor interest is rising but still quite low. According to Ape Wisdom, while upvotes across social media have surged by 1,000%, that number is still only 11. On top of that, NKLA stock has only been mentioned six times on r/WallStreetBets during the past 24 hours.
Any investors hoping to profit from an NKLA stock short squeeze may be out of luck. This meme stock has given investors false hope before and, every time has come crashing back down. It may be time to accept the fact that Nikola belongs in the same category as Mullen Automotive (NASDAQ:MULN): EV stocks with absolutely no growth potential.
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.