After a difficult week, Rivian Automotive (NASDAQ:RIVN) stock is back in the green today. The electric truck producer hasn’t reported anything positive today, but this pop may be the start of something investors have been waiting for. Some reports indicate that a Rivian short squeeze could be coming and if it is, investors should be watching the electric vehicle (EV) stock closely.
Given how much the EV market is struggling right now, momentum has to be powerful to elevate a name like RIVN stock, which has spent the past week trending downward. But now the investors who recently bought in hoping to cash in on short squeeze potential may be about to get their wish.
Is a RIVN Stock Short Squeeze Coming?
Granted, RIVN stock has lost some of its momentum. Shares began rising this morning, climbing more than 2%. But while they’ve dipped since then, they remain in the green. And if the buzz surrounding a potential RIVN stock short squeeze continues, shares will likely keep rising tomorrow.
After months of struggling to retain quick bursts of momentum, Rivian could definitely use a positive catalyst. Thankfully, it got one yesterday when UBS analyst Joe Spak upgraded his Rivian rating from a “sell” to a “hold.” Although that’s more bullish than its previous take, Spak is clearly still hesitant when it comes to the troubled company, likely out of fear that a Rivian short squeeze could be coming. As The Motley Fool reports:
“Of perhaps greater concern to investors, UBS said that short interest in Rivian stock has grown to 18.7%, which makes it increasingly risky to short it (or even keep a sell rating on). Should the EV maker post good news in its next earnings report, or even just promise good news in its guidance, traders might decide to begin covering their shorts, buying back Rivian shares and forcing the price even higher.”
Even with short interest mounting, RIVN stock isn’t gaining traction on social media investing forums. Data from ApeWisdom shows that over the past 24 hours, it has only received 12 mentions on r/WallStreetBets and that the number of both mentioning users is declining. However, the fact that UBS seems to be worried about a potential RIVN stock short squeeze is something important to consider.
As speculative as Rivian appears right now, the company could be on the verge of generating significant revenue from its impressive list of partnerships. If it seems like good news is coming, as it easily could be, short sellers will likely take the opportunity to cover their positions.
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.
