![]() ![]() ![]() On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. However, the accelerating growth in sales is worth the losses, as it has enough liquidity and room to take on more debt. It has a backlog of $3.4 billion.īears argue that LAZR is unprofitable and will remain so for the foreseeable future. The company’s revenue is expected to recover strongly, reaching $88 million this year and more than triple to $274 million next year. Thus, the 26.87% short interest here seems overdone.įurthermore, the most bullish argument for LAZR is its rapidly growing sales. LAZR stock also trades at a relatively discounted price due to earlier selloffs. The company’s fundamentals are starting to turn a corner, and seems to be expanding pretty fast. Luminar Technologies (NASDAQ: LAZR) is among the lower-risk bets among short-squeeze stocks. But I would warn that good news is unlikely to come anytime soon. Thus, betting against the bears is a good idea. Carvana will likely survive this cycle it will continue to feel the pinch for years due to its high debt, but the short interest here seems a little too much. I believe it can survive longer through debt restructuring and cooperation with other companies. The company can also use its $3.9 billion of available liquidity to stay afloat for at least the entirety of 2023. This also leads to share dilution since Carvana does not currently generate enough cash to cover its expenses and debt repayments.Ĭonversely, much of this is already priced in, with the stock down more than 97% from its peak. Much of that debt is floating rate, meaning the business faces a lot of pressure in the current environment as interest rates peak. A lot of Carvana’s problems stem from its massive debt load of nearly $9 billion. The cars sold by Carvana are slightly more expensive than ones sold by dealerships, and that matters in this environment.īut that’s not even the worst part. The business being entirely online makes it difficult as customers are more likely to strike a better deal at their local car dealership. Indeed, it has been burning a lot of cash due to the used car business slowing down. ![]() Source: Jonathan Weiss / Ĭarvana (NYSE: CVNA) is the most shorted stock on the market, with a short interest of 63.53%, ahead of even Silvergate (NYSE: SI). With that in mind, here are three such short-squeeze stocks: Thus, I would only suggest investing in them if you are prepared for some potential heavy losses. These are stocks that are perpetually bleeding, and their businesses have poor fundamentals with high cash burn, which is the reason they are shorted in the first place. Of course, not every short-squeeze stock will deliver such eye-watering gains, and there are some risks involved in going long on these stocks. However, millions of retail investors on Reddit’s r/WallStreetBets forum decided to buy the stock driving up its price, resulting in Melvin Capital losing a staggering $7 billion. We saw this happen two and a half years back with GameStop (NYSE: GME), the video game retailer that hedge funds like Melvin Capital heavily shorted. This creates a positive feedback loop that can drive the stock price even higher. However, if the underlying businesses get even some slightly positive news, their stock prices can rally and deliver multi-bagger gains as bears would have to continuously cover their positions. These stocks have a high percentage of their float sold short by hedge funds and other bearish investors betting on their decline. If you’re looking for some explosive returns in the stock market, you might want to consider betting on short-squeeze stocks. ![]()
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