After the market closed for trading on Wednesday, Feb. 26, short sellers quickly scanned the latest short interest data (which had just been released for the two weeks ended Feb. 15). These shorts know that if a company they are targeting is also being targeted by many others as well, they can get badly burned in a short squeeze ensues. #-ad_banner-#The fact that the short interest in struggling retailer J.C. Penney (NYSE: JCP) had just spiked another 10 million shares in just two weeks (to 128.5 million shares, representing 43% of the trading float) was a… Read More
After the market closed for trading on Wednesday, Feb. 26, short sellers quickly scanned the latest short interest data (which had just been released for the two weeks ended Feb. 15). These shorts know that if a company they are targeting is also being targeted by many others as well, they can get badly burned in a short squeeze ensues. #-ad_banner-#The fact that the short interest in struggling retailer J.C. Penney (NYSE: JCP) had just spiked another 10 million shares in just two weeks (to 128.5 million shares, representing 43% of the trading float) was a cause for concern. The morning after the fresh short interest data came out, shares were squeezed a stunning 25% higher. Management’s prediction that J.C. Penney would not run out of money any time soon was not wanted short sellers were hoping to hear. At this point, both the shorts — as well as the company’s bulls — are wondering: What’s next for this stock? Let’s take a closer look at each argument. Going Terminal? Short sellers love to target stocks that they believe will eventually fall to zero, known as a “terminal short.” And at first glance, J.C. Penney… Read More