Shares of Faraday Future (NASDAQ:FFIE) look like a runaway train right now. At the time of writing, FFIE stock is up more than 380%. When I started writing this, that number was closer to 270%. Faraday Future is clearly becoming a short squeeze candidate that investors are watching very closely.
Much of today’s price action has to do with similar moves in other highly shorted names — and in original, beloved meme stocks. This is all thanks to a post on X by Keith Gill, also known as Roaring Kitty, one of the original Redditors behind the GameStop (NYSE:GME) surge in 2021. GameStop and AMC Entertainment (NYSE:AMC) have been huge gainers over the last two days.
However, Faraday Future is not a typical meme stock, nor was it central in the 2021 frenzy.
So, what gives? Let’s dive into why Faraday Future is flying high today.
FFIE Stock Surges on Short Squeeze Interest
It really all boils down to Faraday Future’s incredibly high short interest. According to data from Fintel, approximately 95% of the FFIE stock float is currently sold short. That doesn’t leave many shares out there for investors to buy and sell, allowing for major short-term price moves to take hold.
Investors are clearly reminiscing on the early 2021 period in which a range of completely uncorrelated stocks surged in tandem on intense retail investor interest. Retail investors appear to be back in earnest, posing problems for short sellers in even some of the most under-the-radar names.
It’s important to consider that Faraday Future is in dire financial straits (hence the sky-high short interest). The company has moved to raise funding to stay afloat, and recently had to avoid eviction at its Los Angeles headquarters. For many investors, the writing is on the wall.
For today though, retail investors are in charge and FFIE stock is surging higher. This will be a fun company to watch.
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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.
