Billing itself as a technology-enabled financial services firm, Beneficient (NASDAQ:BENF) captured the spotlight on Wall Street with a dramatic 390% lift on Friday before paring down some of the massive return. Initially catapulting BENF stock was news about the company meeting Nasdaq’s minimum price rule. In addition, a framework for sparking a short squeeze could be brewing for shares.
According to a press release, Beneficient just regained compliance regarding the minimum bid price requirement of the exchange. Rule 5550(a)(2) states that for an entity to remain listed, “the minimum bid price per share for common stock shall be at least $1 per share.”
With the notice, speculators have assurances that — assuming continued compliance — BENF stock will remain listed and tradeable on the exchange. For a small firm like Beneficient, a Nasdaq listing represents a true lifeblood. By being tradable on a proper exchange, Beneficient will enjoy benefits such as higher visibility and greater liquidity.
Possible Short Squeeze Brewing for BENF Stock
Another factor that could be dramatically lifting BENF stock today is the possibility of a short squeeze. To be clear, Fintel shows that the security’s short interest sits at only 2.77% of its float. That’s not remarkable by any stretch of the imagination. However, as Benzinga alludes to, a framework for a short squeeze could be materializing with BENF.
First, even though the short interest as of the latest read is minimal, Fintel reports that shares available to be shorted at a leading prime brokerage slipped to zero just hours ago. That said, this metric is not based off an all-encompassing count, so traders should be careful with their interpretation of the data.
Nevertheless, the second point here is particularly intriguing: The shares outstanding count for BENF stock is only 3.36 million, with the float (shares available for public trading) sitting at 1.1 million. With 64.45% of shares held by insiders and 20.51% held by institutions, per Yahoo Finance, the ability to bet against Beneficient is limited.
Not only that, Fintel reports that the short borrow fee for those who do wish to bet against BENF stock recently soared to 526.49%. Back on April 22, this metric was “only” 20.19%.
Why It Matters
Although a short squeeze could send BENF stock even higher than where it currently stands, context matters. Even with today’s blistering run, Beneficient is down 83% in the charts since the beginning of the year. Further, Gurufocus points out that the company incurred a retained loss of nearly $2 billion as of December 2023.
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On the date of publication, Josh Enomoto 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.
