In this article, we discuss the 10 most-shorted stocks Reddit’s WallStreetBets is paying attention to. If you want to skip our detailed analysis of these stocks, go directly to the 5 Most-Shorted Stocks Reddit’s WallStreetBets Is Paying Attention To.
Reddit forum WallStreetBets, with a user base of well over 10.7 million and growing, rose to prominence in the finance world after it was identified as a key social hub frequented by retail investors in the GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings, Inc. (NYSE: AMC) short squeeze at the beginning of this year. Since December 2020, when it had just 1.8 million members, the forum has increased in popularity and influence, sparking appeals for regulation around social media speculation and memeification of the stock market.
Some of the stocks presently popular on WallStreetBets include Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL), The Goldman Sachs Group, Inc. (NYSE: GS), Shopify Inc. (NYSE: SHOP), Bank of America Corporation (NYSE: BAC), and NVIDIA Corporation (NASDAQ: NVDA), among others. In addition to these, firms like GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings, Inc. (NYSE: AMC) also continue to occupy the interest of retail investors months after frustrating short-selling attempts by hedge funds.
Stocks with high short interests remain some of the most discussed on the Reddit forum. As hedge funds track Reddit data in real-time to avoid the losses incurred earlier this year, a pattern is beginning to emerge. News publication Business Insider reports that conversations around meme stocks, apart from ones with fervent fan bases, tend to be short-lived and one-time occurrences. In simple words, investors should note that stocks with high short interest only stay popular on the forum for a short time and then lose appeal.
This aligns largely with an earlier report by New York Post that claimed that hedge funds that had been hit hard by the January short squeezes had bounced back in February, reporting gains that more than offset the losses. The complete list of hedge funds that benefited from the meme stock craze is available here. It remains to be seen whether retail investors can take on big finance for the second time in less than a year. Traders are fervently searching for the next GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings, Inc. (NYSE: AMC) already.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 most-shorted stocks Reddit’s WallStreetBets is paying attention to. These were ranked keeping in mind the float shorted, the number of mentions on Reddit, analyst ratings, business fundamentals, and hedge fund sentiment around each.
Most-Shorted Stocks Reddit’s WallStreetBets Is Paying Attention To
10. Fisker Inc. (NYSE: FSR)
Number of Hedge Fund Holders: 22
Float Shorted: 23.7%
Fisker Inc. (NYSE: FSR) is placed tenth on our list of 10 most-shorted stocks Reddit’s WallStreetBets is paying attention to. The stock has returned 19% to investors over the past year. The firm makes and sells electric vehicles and is based in California. On June 30, the firm announced that it had partnered with Magna International to open a car manufacturing facility in Austria that would help the company speed up the development of Fisker Ocean SUVs. The company has a market cap of over $4.7 billion.
On June 8, investment advisory RBC Capital initiated coverage on Fisker Inc. (NYSE: FSR) stock with an Outperform rating and a price target of $27, noting that the plan by the firm to use third parties for electric vehicle manufacture was differentiated from others in the business.
At the end of the first quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $337 million in Fisker Inc. (NYSE: FSR), down from 18 in the previous quarter worth $146 million.
Just like GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL), The Goldman Sachs Group, Inc. (NYSE: GS), Shopify Inc. (NYSE: SHOP), Bank of America Corporation (NYSE: BAC), and NVIDIA Corporation (NASDAQ: NVDA), Fisker Inc. (NYSE: FSR) is one of the stocks Reddit’s WallStreetBets is paying attention to.
9. Riot Blockchain, Inc. (NASDAQ: RIOT)
Number of Hedge Fund Holders: 12
Float Shorted: 24.2%
Riot Blockchain, Inc. (NASDAQ: RIOT) is a Colorado-based firm that focuses on cryptocurrency mining. It is ranked ninth on our list of 10 most-shorted stocks Reddit’s WallStreetBets is paying attention to. The company’s shares have returned 1,165% to investors over the past twelve months. On July 1, investment advisory B Riley boosted the price target of the stock to $51 from $45. The advisory maintained a Buy rating on the shares in the update, underlining that the crypto crackdown in China would benefit North American miners.
On July 8, Riot Blockchain, Inc. (NASDAQ: RIOT) announced coin production results for the month of June, revealing that it had mined 243 Bitcoin during the month, up from 48 in June 2020, representing a year-over-year increase of 406%.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Riot Blockchain, Inc. (NASDAQ: RIOT) with 2.2 million shares worth more than $120 million.
Alongside GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL), The Goldman Sachs Group, Inc. (NYSE: GS), Shopify Inc. (NYSE: SHOP), Bank of America Corporation (NYSE: BAC), and NVIDIA Corporation (NASDAQ: NVDA), Riot Blockchain, Inc. (NASDAQ: RIOT) is one of the stocks Reddit’s WallStreetBets is paying attention to.
8. The GEO Group, Inc. (NYSE: GEO)
Number of Hedge Fund Holders: 13
Float Shorted: 24.2%
The GEO Group, Inc. (NYSE: GEO) stock has returned 13% to investors over the past three months. It is placed eighth on our list of 10 most-shorted stocks Reddit’s WallStreetBets is paying attention to. The firm operates as a real estate investment trust. It is based in Florida. On June 17, the share price of the firm jumped more than 6% after the CEO of the company bought more than 166,000 shares in the firm, increasing his total holdings to close to 3 million shares. The CEO bought the shares at $6.75 per share.
On June 8, investment advisory Wedbush initiated coverage of The GEO Group, Inc. (NYSE: GEO) stock with a Neutral rating and a price target of $7, highlighting the operating profitability and cash flows as growth catalysts but cautioning against political opposition to the business.
At the end of the first quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $725 million in The GEO Group, Inc. (NYSE: GEO), down from 18 in the previous quarter worth $610 million.
In addition to GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL), The Goldman Sachs Group, Inc. (NYSE: GS), Shopify Inc. (NYSE: SHOP), Bank of America Corporation (NYSE: BAC), and NVIDIA Corporation (NASDAQ: NVDA), The GEO Group, Inc. (NYSE: GEO) is one of the stocks Reddit’s WallStreetBets is paying attention to.
In its Q1 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and The GEO Group, Inc. (NYSE: GEO) was one of them. Here is what the fund said:
“GEO Group (GEO) declined 9.8% during the period as President Biden’s Executive Order directing the Department of Justice not to renew contracts with private prisons at the Federal level offset solid Q4 results. GEO reported Q4 revenue of $578.1M, in-line with consensus while EBITDA of $107.9M topped estimates of $87.7M by 23%. Adjusted Funds from Operations (AFFO) of $0.62/share fell 6% Y/Y and provided coverage of 2.5x on the quarterly dividend of $0.25/share (13.5% annualized yield). The company exited the quarter with ample liquidity of $420M and remains committed to paying down $75M-$100M of debt annually. Management introduced 2021 guidance with revenue of $2.24Bn-$2.27Bn, EBITDA of $386M-$400M, and AFFO of $1.98-$2.08, all of which assumes Bureau of Prison contracts with optional expiration periods in 2021 will not be renewed. Additionally, GEO announced a $200M convertible notes offering due 2026 with net proceeds funding the redemption of the 5.875% unsecured notes due 2022.”
7. Sundial Growers Inc. (NASDAQ: SNDL)
Number of Hedge Fund Holders: 7
Float Shorted: 24.3%
Sundial Growers Inc. (NASDAQ: SNDL) is ranked seventh on our list of 10 most-shorted stocks Reddit’s WallStreetBets is paying attention to. The company’s shares have offered investors returns exceeding 68% over the course of the past six months. The firm makes and sells cannabis products. The stock stands to benefit from the recent hype around a federal marijuana legalization bill. It could also improve sales numbers as more internet-based platforms open up to cannabis products. Apple recently allowed marijuana delivery apps on the App Store.
On July 25, investment advisory ATB Capital upgraded Sundial Growers Inc. (NASDAQ: SNDL) stock to Sector Perform from Underperform, raising the price target to 80c from 50c. The rating update was issued after the cannabis firm closed the purchase of Inner Spirit Holdings.
At the end of the first quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $18 million in Sundial Growers Inc. (NASDAQ: SNDL), up from 2 the preceding quarter worth $2 million.
GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL), The Goldman Sachs Group, Inc. (NYSE: GS), Shopify Inc. (NYSE: SHOP), Bank of America Corporation (NYSE: BAC), and NVIDIA Corporation (NASDAQ: NVDA) are stocks Reddit’s WallStreetBets is paying attention to, just like Sundial Growers Inc. (NASDAQ: SNDL).
6. Nikola Corporation (NASDAQ: NKLA)
Number of Hedge Fund Holders: 19
Float Shorted: 25.1%
Nikola Corporation (NASDAQ: NKLA) stock has offered investors returns exceeding 21% over the course of the past three months. It is placed sixth on our list of 10 most-shorted stocks Reddit’s WallStreetBets is paying attention to. The company is based in Arizona and markets energy and transportation solutions. On June 23, the share price of the firm jumped more than 3.5% after it disclosed that it had invested close to $50 million in a clean energy project in Indiana. The firm has a market cap of over $5.5 billion.
On May 27, investment advisory BTIG initiated coverage of Nikola Corporation (NASDAQ: NKLA) stock with a Buy rating and a price target of $18, underlining that the production of EVs by the firm would ramp up in the second half of 2022.
Out of the hedge funds being tracked by Insider Monkey, San Francisco-based firm Inclusive Capital is a leading shareholder in Nikola Corporation (NASDAQ: NKLA) with 10.2 million shares worth more than $142 million.
GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL), The Goldman Sachs Group, Inc. (NYSE: GS), Shopify Inc. (NYSE: SHOP), Bank of America Corporation (NYSE: BAC), and NVIDIA Corporation (NASDAQ: NVDA) are stocks Reddit’s WallStreetBets is paying attention to, alongside Nikola Corporation (NASDAQ: NKLA).
In its Q4 2020 investor letter, Bireme Capital, an asset management firm, highlighted a few stocks and Nikola Corporation (NASDAQ: NKLA) was one of them. Here is what the fund said:
“Nikola Corporation (NKLA) is a poor-man’s facsimile of Tesla. Even the name is a blatant ripo: both are named aer the inventor Nikola Tesla. NKLA is a pre-revenue company founded in 2014 that has yet to bring a product to market, despite the promotion of a dizzying array of concepts:
Nikola Badger: pickup with both fuel-cell and electric variants
Nikola One: fuel-cell commercial semi-truck
Nikola Two: fuel-cell commercial semi-truck
Nikola Tre: electric commercial semi-truck
Nikola NZT: electric four-wheel drive utility vehicle
Nikola Reckless: electric military grade o-highway vehicle
Nikola WAV: electric watersports vehicle
As far as we can tell from their latest investor communications, only the Nikola Tre Commercial semitruck is still in development.
As far as we can tell from their latest investor communications, only the Nikola Tre Commercial semitruck is still in development. NKLA’s history is full of deception and vaporware. They showed a video of the Nikola One in motion; they later admitted that it didn’t work and was just rolling down a hill. NKA’s founder Trevor Milton resigned in disgrace aer Hindenburg Research published a report calling NKLA an “intricate fraud.” NKLA is currently under investigation by both the SEC and DoJ. Partnerships with GM, Republic Services and BP have been canceled. Nevertheless, the company sports an $8b market cap, because “electric vehicles.” Though pretenders are particularly ubiquitous in the bubbly EV industry, pretenders are to be found in many other industries as well.”
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Disclose. None. 10 Most-Shorted Stocks Reddit’s WallStreetBets Is Paying Attention To is originally published on Insider Monkey.
