Auris Medical Holding AG (NASDAQ: EARS) is flying early on in the trading session this morning, but the company hasn’t released any news. There haven’t been any SEC filings either. So, what’s the deal? Well, it looks like the stock is gearing up for a short squeeze and savvy traders are working to get in ahead of this thing. Today, we’ll talk about:
- Why I believe that EARS is headed for a short squeeze;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
EARS Is Lining Up For A Short Squeeze
As mentioned above, Auris Medical is having a strong start to the trading session this morning, even though it is lacking any meaningful news. At the end of the day, this looks like a short squeeze in the making and excited traders getting in ahead of the gains. Here’s why I say that:
EARS is a stock that has tremendously high short interest. According to ShortSqueeze.com, more than 70% of the float is traded short. To add to the evidence here, much of that short interest came from a recent, yet overwhelming increase of 176% in short activity. When short interest is this high, the wind blowing in the right direction can lead to a short squeeze.
Going further, there’s quite a bit for investors to be excited about when it comes to EARS. Just a couple of weeks ago, the company announced positive results from a second Phase 1 clinical trial that evaluated intranasal betahistine in healthy volunteers. The study met its primary endpoint, showing superior bioavailability over a range of four intranasal betahistine doses when compared to oral betahistine. Furthermore, the safety and tolerability profiles were strong. So, this vertigo treatment is showing some serious promise and with the end of Phase 1 behind us, it’s only a matter of time before we see a clinical or regulatory catalyst as the company furthers its intranasal betahistine assess through the development process. All in all, it’s not a good time to be short.
What We’re Seeing From The Stock
Short interest is an interesting factor, and it’s one that tends to lead to some of the biggest gains that we see in the market. At the end of the day, I believe that Auris Medical is on its way to a short squeeze that will be one of these monumental runs. That may be starting today as the stock is lighting up enough for our partners at Trade Ideas to send the alert. Currently (10:32), EARS is trading at $0.71 per share after a gain of $0.073 per share or 11.46% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on EARS. In particular, we’re interested in following the continued development of intranasal betahistine as the treatment seems to be showing promise. We’re also interested in following the potential for a short squeeze here as we believe that it is everpresent. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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