On May 14, 2024, Lucid Motors (NASDAQ: LCID) stock surged dramatically, trading at $3.18, up by $0.37 (13.21%) today. This spike has generated buzz about a potential short squeeze.
Lucid’s short interest stands at 280,606,688 shares, according to NASDAQ, with a short interest ratio of 25.26 days to cover. The short interest as a percentage of float is an alarming 31.68%, suggesting the could be significant volatility ahead.
The surge in Lucid’s stock price can be linked to a broader revival of meme stocks like GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC), with one X user anticipating the move in advance on May 13.
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On May 13 and 14, these stocks saw a resurgence fueled by social media activity, particularly on X (formerly Twitter). Influential figures like “Roaring Kitty,” known for his role in the 2021 GameStop frenzy, made a return to social media, sparking renewed interest and coordinated buying efforts among retail investors.
GameStop’s stock jumped by 74% on May 13, closing at $30.45, while AMC surged by 50% on the same day. This wave of enthusiasm spread to other heavily shorted stocks, including Lucid.
The dramatic increase in buying pressure led to a rush among short sellers to cover their positions, driving prices even higher in a classic short squeeze scenario.
The high short interest ratio indicates a large volume of Lucid shares are sold short, and the recent price movements suggest that short sellers might be scrambling to cover their positions to avoid further losses
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