Most of today’s headlines are rightly focused on the resurgence of certain meme stocks in the market. However, one intriguing company that’s also up big today is energy drink maker Celsius Holdings (NASDAQ:CELH). CELH stock is up nearly 5% in early afternoon trading.
This move follows an incredible move in meme stock GameStop (GME) of more than 70% this afternoon, with other highly-shorted names seeing increasing interest. For many speculators, the return of Keith Gill (aka Roaring Kitty) to social media is the catalyst that has apparently been needed in the market. His timing of previous moves in GME stock has been incredible. Thus, many retail traders are attempting to predict where more short squeezes could form in the market.
Some have suggested that Celsius could be an unlikely winner from this rally due to its relatively high short interest. According to the most recent data available from Fintel, around 10% of the company’s float could be sold short. Here’s what some analysts think that could mean for Celsius in the near term and what investors should be watching when it comes to this high-growth company.
CELH Stock Surges as Meme Stock Mania Makes a Comeback
Impressive near-term rallies in stocks that have been heavily sold short, and are out of favor with many institutional investors, have led to some rather impressive losses for short sellers today. Most notably, those who have sold GME stock short today have lost more than $1 billion, as per recent reports. And while those numbers may certainly not be as significant for those shorting Celsius, this is a company that’s starting to pique certain analysts’ attention as a potential way to play this market trend.
The company’s status as a disruptor in the high-growth energy drink market and its ability to take away market share from peers could provide the fundamentals to support a rally, according to Wedbush analysts. Additionally, these analysts note that high short interest could lead to an upward spiral in price, with many now viewing this company as an under-the-radar way to play this recent surge of momentum in growth stocks.
I’m not so sure Celsius qualifies as a potential short squeeze play, given the reality that there are many other more heavily-shorted stocks out there. But it’s certainly an intriguing angle I hadn’t considered. Currently, Celsius is a company that’s on my watch list, but I’ll be watching this stock closer in the coming days, and provide updates as they come.
On the date of publication, Chris MacDonald did not have (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.
