- Food delivery company Blue Apron has experienced extreme volatility this year, making it a potential short-squeeze target.
- American Virtual Cloud Technologies recently announced a 15-for-1 reverse stock split in order to keep from being delisted.
- Retail investors are more bullish on LiveWire than analysts, who think the electric motorcycle company has little potential.
1. Blue Apron
Blue Apron Holdings (APRN) - Get Free Report is a New York-based company that delivers original recipes and ingredients to consumers. Blue Apron also operates an e-commerce platform that sells pantry items, kitchenware, and related products.
Shares of Blue Apron have taken investors for a wild ride this year. In January, Citron Research issued a super-bullish rating on Blue Apron, pointing out that the company could quadruple its share price over the year.
Citron's bullish thesis was based on the company's solid fundamentals, along with rising food costs due to inflation.
"Blue Apron is going to prove to be one of the greatest corporate turnaround stories of this century!" analysts at Citron Research wrote.
However, this is not exactly what happened. Within the last 52 weeks, the stock has ranged between lows of $2.27 per share and highs of $12.76. The last rally occurred between August and September, when shares of Blue Apron increased 145%.
Market skepticism about Blue Apron has caused short interest to comprise 28% of its stock float — a level that is considered very high.
And in early October, APRN shares plummeted more than 40% in a single trading session after the company announced the sale of up to $15 million worth of its common shares.
Even though dilution should have a bearish effect on the company's share price, Blue Apron is looking to increase the company's funds without having to issue more debt.
Considering that Blue Apron is already on the radar of traders and retail investors who see it as a potential short-squeeze play, the high percentage of short interest may cause some strong bullish moves in the short term.
2. American Virtual Cloud Technology
American Virtual Cloud Technologies (AVCT) - Get Free Report is an Atlanta-based company with a market cap of $20 million. It provides IT solutions such as data centers, enterprise network solutions, cybersecurity, etc.
The company has been in free fall this year. Its stock is already down over 93% year to date, which is not surprising, considering that AVCT has an earnings yield of -1,332%.
Currently, AVCT is a penny stock. Recently, the company announced a 15-for-1 reverse stock split to keep its share price above $1 in order to avoid delisting. But despite its poor performance, about only 12% of its float is shorted, which is not particularly very high.
However, the stock is quite popular among retail investors on social media platforms as a meme stock and a potential short-squeeze play. Reddit-using investors think that AVCT could make an interesting trade, given its high volatility.
Also, there's the possibility that the partnership between its Kandy cloud computing business and Emirati telecom provider Etisalat could lead to higher earnings for AVCT.
LiveWire (LVWR) is the electric motorcycle spinoff of the iconic Harley Davidson (HOG) - Get Free Report brand. The company was recently listed on the New York Stock Exchange on September 27 through a special purpose acquisition company (SPAC) merger. Currently, it has a market cap of about $1.9 billion.
LiveWire is the first publicly traded electric motorcycle company, yet it is likely to face strong selling pressure. Most experts think the company has little chance of standing out among EV makers, especially with Tesla (TSLA) - Get Free Report reigning supreme in this market.
However, LiveWire has caught the attention of retail investors and short-squeeze hunters due to its high volatility and modest float. Currently, the company has a float of 900,000 shares, plus 2.5 million shares that are tied up with LiveWire's SPAC sponsor John Garcia* in a one-year lockup period.
Currently, there are 120,000 shares of LVWR being shorted, indicating that eventual buying pressure could trigger a short squeeze soon.
* Updated on October 11 at 12:10 pm EST.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)