Ginkgo Bioworks (NYSE:DNA) stock has seen a recent surge in short interest combined with a jump in its share price, fueling speculation that a short squeeze is in the makings for DNA stock. Indeed, over the past few days, the number of DNA short shares available has recently sunk from around 750,000 to 0, according to financial data website Fintel.
Now, this doesn’t mean that there aren’t any more shore shares available, as Fintel doesn’t sample every single brokerage. But it does show a clear surge in the demand for short shares of DNA stock.
Additionally, DNA’s short sale volume has climbed quite dramatically over the past few weeks. In fact, according to the Financial Industry Regulatory Authority (FINRA), the sale of DNA stock has surged to 18.6 million as of last Friday, April 26. This is a steep climb from just weeks ago, when it had a short volume of about 7.3 million on April 16.
DNA Stock Surges Amid Short Squeeze Speculation
Perhaps most interestingly, however, is that Ginkgo Bioworks stock actually jumped 15% today and is up 17% over the past five trading sessions, even despite the ramping short interest. This hasn’t coincided with any major news related to DNA stock or the company.
While not quite on level of GameStop (NYSE:GME) yet, this suggests that investors may be attempting a short squeeze on DNA.
A short squeeze is a targeted effort to bring a stock price up by rapidly purchasing large amounts of the security. This hurts investors with a net short position of the stock. If the stock climbs high enough, investors are “squeezed” into selling short shares to avoid potentially brutal losses, further ballooning the price of the security in the process. During the infamous GameStop short squeeze, GME stock rose upward of 1,500% in just a few days.
Although DNA stock isn’t anywhere near that level currently, it’s recent trading behavior is certainly bizarre. Still, whether this ends up being the start of a massive short squeeze remains to be seen.
On the date of publication, Shrey Dua 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.
