Amesite (AMST) Stock Leaves Short Sellers Shaking

Amesite Inc (NASDAQ: AMST) is screaming for the top in the market this morning, following up on the tremendous gains the stock has seen over the past couple of trading sessions. While there’s no news that would generally act as a catalyst for the run, retail investors seem to be pushing for a short squeeze. Here’s what’s happening:

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AMST Short Squeeze

As mentioned above, there has been no news released by Amesite suggesting that the stock should be seeing such compelling momentum toward the top. Nonetheless, there doesn’t have to be in today’s market. 

Since the beginning of the year, we’ve seen a concerted effort from retail investors to band together and force short squeezes in stocks that are heavily shorted by hedge funds. The move, often being considered a David and Goliath level battle, has resulted in dramatic gains in stocks like GameStop and AMC. 

Now, it seems as though AMST stock is next on the list. 

For those of you who haven’t been following the story, retail investors have been pointing to the fact that big money hedge funds borrow shares from investors with long positions and sell them into the market. The goal is for the stock to fall and those shares to be picked up later at a lower rate before being returned, ultimately generating a profit. 

However, the shares need to be returned no matter which direction the stock goes, and when the stock goes up, the short seller ends up losing money when repurchasing the shares as they’ll need to pay more than they sold them for. 

As a result, when a heavily shorted stock ticks up enough, short sellers move to cut their losses by purchasing more shares in what’s known as a race to cover. This is where the squeeze happens. The increased demand from short sellers tips the scales of the driving factor of a stock price, causing the stock to skyrocket. 

Well, that seems to be exactly what’s happening with AMST stock. For some time now, the education-centric company has been a prime target for short sellers, with the current short interest sitting at about 28%. That’s a lot of shares that will need to be snapped up when a squeeze takes place. 

Across social media, we’re seeing messages about a coming short squeeze on the ticker as well, showing that there is indeed a concerted effort among the retail community to push the stock for the top. 

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The Bottom Line

The bottom line here is simple. Considering the heavy short position and overwhelming social volume surrounding the stock, it’s clear that retail investors have found yet another target that’s primed for a short squeeze. All in all, AMST stock is one to watch closely!

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