Shorts Look Wrong Squeeze
whizjr@whizjr
−5.8%
since Oct 14
The idea
I believe the market gets crowded trades wrong sometimes, and this basket looks for heavily shorted stocks where the bearish case is actually cracking: improving business trends, stabilizing balance sheets, or upcoming earnings that could force short sellers to cover. Rather than just buying the most-shorted names, I pick one stock at a time and spread the bets across six unrelated groups like consumer turnarounds, AI compute, and biotech, so no single pick can sink the whole thing. I keep a cash cushion and accept that these are volatile stocks, if a squeeze fails, I own the full drop.
What it owns
- Retail and restaurant stocks have fallen on worries about customer spending, but steady sales figures can force short sellers to cover their positions. · Dutch BrosRoughly half of its tradable shares are sold short despite steady expansion of new locations, and the case holds as long as same-store sales keep growing and new shops turn profitable., LyftIt is now profitable, yet shorts still bet it loses share to larger rivals and autonomous vehicle services., Under ArmourIt is attempting a brand turnaround while shorts bet it will fail to regain ground., Kohl'sIt has squeezed short sellers in the past, and could do so again if sales stabilize and debt remains controllable., The Cheesecake FactoryIt has risen substantially this year, drawing new short sellers who doubt the gains, though recent traffic patterns appear strong.23%
- Data center and mining companies face heavy short selling based on funding concerns, which can reverse sharply when their results show growing demand for computing power. · IREN LimitedIt is shifting from bitcoin mining into renting out artificial intelligence computing capacity, with reported multiyear cloud agreements that would confirm the transition., CleanSparkAbout two-fifths of its tradable shares are sold short, one of the heaviest short positions in bitcoin mining, and the case depends on sustained bitcoin prices and falling mining costs., Applied DigitalIt builds data centers for artificial intelligence customers and plans to add substantial capacity, which short sellers doubt it can finance without heavy share dilution., Bitdeer Technologies GroupIt mines bitcoin, designs its own mining chips, and is expanding into hosting artificial intelligence workloads with new facilities toward a multihundred megawatt target.20%
- Small artificial intelligence and defense software companies have been written off by short sellers but are now winning government contracts and improving profitability. · BigBear.ai HoldingsShorts bet it keeps burning cash, but recent government contract announcements and an upcoming earnings report could force short sellers to buy back shares., SoundHound AIAbout two-fifths of its tradable shares are sold short and recent stock weakness means modest positive developments could trigger covering, though growth must accelerate to validate the case., Ondas HoldingsIt sells drone and airborne defense systems, recently launched artificial intelligence products with a major partner, and secured European certification for a new aircraft protection system., C3.aiIt is in the middle of a strategic reset, and the case is that short sellers are now too pessimistic even though the recovery may take multiple quarters to confirm.17%
- Drug developers face short selling based on skepticism about trial results and funding, but positive data can spark sudden buying by covering short sellers. · Beam TherapeuticsIt performs precise genetic editing with newer methods than older approaches, and shorts are wagering that trial results will disappoint or cash will run out., ImmunityBioIt already sells an approved cancer drug and has seen its stock rise sharply, which attracts shorts skeptical that sales can justify the valuation., CelcuityIt is developing a breast cancer treatment, and shorts are betting the trial results or regulatory path will disappoint.11%
- Growth companies that have declined sharply are heavily shorted, and a single strong quarter can trigger buybacks from short sellers. · Upstart HoldingsIt uses artificial intelligence to underwrite consumer loans, and shorts contend it cannot keep loans funded when credit tightens., The Trade DeskIt sells software for purchasing online advertisements and has fallen sharply this year, so shorts are betting its competitive advantage has eroded.10%
- Space companies carry significant short positions where a successful launch or new contract can quickly shift market sentiment. · AST SpaceMobileIt is building satellites designed to connect directly to ordinary phones without special hardware, a capability that requires both successful launches and sustained carrier adoption., Intuitive MachinesIt wins contracts from government space agencies for lunar missions, giving it real revenue that short sellers undervalue.9%
- Cash10%