The meme stock trading frenzy has suddenly sprung back to life, with shares in GameStop (GME) and AMC Entertainment Holdings (AMC) blasting higher thanks to … well, let's call it speculative enthusiasm on social media.
GameStop rose by nearly three-quarters in a single session after one of the biggest boosters of the first meme-stock frenzy returned to the internet trenches following a multi-year absence. Apparently, a cryptic post on X by Keith Gill, aka "Roaring Kitty," was all it took to once again set off squeezes in some heavily shorted names.
Meme stocks tend to prompt consternation and confusion among normie market participants, but then that's just part of the fun. While it's technically true that meme stocks offer the remote possibility of earning penny-stock-like returns, they mostly seem to function as a source of nihilistic belly laughs for a select community of day traders.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Either way, it appears the retail raiding hordes are back. They are piling into stocks with high short interest – in other words, companies where many shares are being used to bet against the stock – with the intention of setting off a short squeeze.
A quick primer: hedge funds and other market participants can bet against a stock by "shorting" it. But those bears sometimes get it wrong, and when they do, it can trigger an effect called a "short squeeze."
Stocks with high short interest
You can learn more about how short squeezes work in our explainer, but in brief, it's a phenomenon that occurs when buying pressure in a stock forces shorts to unwind their negative bets – which they can do only by purchasing the stock – fueling a virtuous cycle that sends shares aggressively higher.
To get a sense of where the next short squeeze candidate might come from, we've put together a table of the 15 stocks with the highest short interest by shares outstanding in the broad Russell 3000 Index, according to the latest data available from YCharts.
But first, a caveat: going long on a stock with high short interest thinking you're going to get rich off panic-buying by short sellers is an exceedingly dangerous idea. It's at least as risky as shorting stocks with high short interest in the first place.
When it comes to playing around with high short interest stocks, unless you are uncommonly lucky, let's just say the risks greatly outweigh the rewards.
| Company | Ticker | % of shares outstanding sold short |
|---|---|---|
| Beyond Meat | BYND | 39.1 |
| Biomea Fusion | BMEA | 38.9 |
| Arbor Realty Trust | ABR | 38.5 |
| Cutera | CUTR | 37.6 |
| Medical Properties Trust | MPW | 37.0 |
| Kohl's | KSS | 32.8 |
| Sunnova Energy | NOVA | 32.3 |
| Cassava Sciences | SAVA | 32.1 |
| Novavax | NVAX | 32.0 |
| Altimmune | ALT | 31.5 |
| EVgo | EVGO | 30.2 |
| B. Riley Financial | RILY | 29.9 |
| Trupanion | TRUP | 29.5 |
| iRobot | IRBT | 29.3 |
| Medifast | MED | 28.5 |
Related content
-
6 Stunning Waterfront Homes for Sale Around the USFrom private peninsulas to lakes, bayous and beyond, Kiplinger's "Listed" series brings you another selection of dream homes for sale on the waterfront.
-
Six Reasons to Disinherit Someone and How to Do ItWhether you're navigating a second marriage, dealing with an estranged relative or leaving your assets to charity, there are reasons to disinherit someone. Here's how.
-
Should You Still Wait Until 70 to Claim Social Security?Delaying Social Security until age 70 will increase your benefits. But with shortages ahead, and talk of cuts, is there a case for claiming sooner?
-
Retirement Planning for Couples: How to Plan to Be So Happy TogetherPlanning for retirement as a couple is a team sport that takes open communication, thoughtful planning and a solid financial strategy.
-
Market Turmoil: What History Tells Us About Current VolatilityThis up-and-down uncertainty is nerve-racking, but a look back at previous downturns shows that the markets are resilient. Here's how to ride out the turmoil.
-
Stock Market Today: Stocks Surge to Close a Volatile WeekIt was another day with a week's worth of both news and price action, but it ended on a strongly positive note.
-
Home Insurance: How to Cut Costs Without Losing CoverageNatural disasters are causing home insurance premiums to soar, but don't risk dropping your coverage completely when there are ways to keep costs down.
-
Markets Roller Coaster: Resist the Urge to Make Big ChangesYou could do more harm than good if you react emotionally to volatility. Instead, consider tax-loss harvesting, Roth conversions and how to plan for next time.
-
Why Homeowners Insurance Has Gotten So Very ExpensiveThe home insurance industry is seeing more frequent and bigger claims because of weather, wildfires and other natural disasters.
-
Stock Market Today: Uncertainty Proliferates: Dow Loses 1,014 PointsWeaker-than-expected consumer inflation data wasn't enough to stabilize sentiment during another volatile day for financial markets.
