It feels like 2021 all over again, with both meme stocks and debate around which name will be the next short-squeeze target surging. Canoo (NASDAQ:GOEV) is certainly seeing some of this short-squeeze interest today, with GOEV stock up more than 30% in afternoon trading.
This move appears to be directly tied to GOEV stock’s underlying fundamentals. A combination of intense retail investor interest, a low share price (making options bets cheaper) and high short interest have created the perfect scenario for some to start talking about a squeeze.
According to data from Fintel, Canoo’s short interest has rocketed to 13.5%, with short sellers simply not able to get their hands on enough shares to sell short right now.
With these factors in mind, let’s dive into what other news may be driving up GOEV — and whether a squeeze is truly in order for this beaten-down electric vehicle (EV) stock.
Why Is GOEV Stock Surging Today?
The aforementioned short squeeze story is certainly driving a good portion of the narrative around this company today. However, there’s also a key catalyst investors are watching. Specifically, Canoo has received approval for its Oklahoma facility to be considered a foreign trade zone (FTZ).
Canoo noted in a press release that the U.S. Department of Commerce has designated the company’s facility as a FTZ, marking a key milestone that will allow Canoo to continue on its path to deliver greater unit profitability and potentially break even sooner than expected.
This designation essentially allows the company to eliminate customs duties for vehicles sold overseas, with the company noting the vast majority of its parts are sourced domestically. Canoo also expects to save roughly 5% “on parts imported from the rest of the world” as a result, amplifying its push to break even in short order.
Of course, there are other factors at play with why GOEV stock has been beaten down so hard by the market. And while this catalyst is noteworthy, it’s also more likely that today’s rise has more to do with technical and speculative factors than this fundamental driver.
Still, all of these factors are important to watch — and investors are doing so. This will remain a top stock for investors and traders to keep a close eye on in the coming days. I know I will be doing just that.
On the date of publication, Chris MacDonald 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.
