Avinger Inc (NASDAQ: AVGR) is screaming for the top in the market this morning, but if you’re looking for press releases or SEC filings that act as the catalyst, you’ll be hard pressed to find anything.
So, what’s the deal?
The gains seem to be the result of retail investors piling in, in an attempt to squeeze the shorts out of their positions. Here’s what’s going on:
Skip to What You Want to Read
- Investors Squeeze Shorts Out of Avinger Stock
- What Is Avinger?
- What Analysts Think About AVGR Stock
- Risks to Consider Before Buying AVGR Stock
- Final Thoughts
Investors Squeeze Shorts Out of Avinger Stock
As mentioned above, Avinger is screaming for the top in the premarket hours this morning, trading on gains of well over 50%. However, there hasn’t been any news that provides a clear catalyst for the run, but there doesn’t have to be.
Over the past month, Wall Street Bets Redditors have proven what retail investors can do in the market when they band together, and that seems to be what’s happening now as they squeeze the shorts out of their positions on AVGR stock.
The stock makes for a strong short squeeze target too.
In fact, at the moment, the short percentage of the volume on the stock sits at about 18%. That’s pretty high. Beyond that, the public float on AVGR is about 94 million shares. While that sounds like a lot, it doesn’t take much for 94 million shares to become a very short supply.
So, between the fact that there’s heavy short interest, and the fact that there’s a relatively small float in the stock, the short squeeze on AVGR has the potential to generate dramatic gains, far and beyond what we’ve already seen this morning.
What Is Avinger?
Avinger is a biotechnology company that’s focused on the development and commercialization of medical devices. In particular, the company offers a state-of-the-art image-guided atherectomy device, along with other image-guided devices designed to make the physician’s life easier while improving outcomes for patients.
What Analysts Think About AVGR Stock
There aren’t many analysts covering Avinger stock at the moment, but what it lacks in terms of quantity, it makes up for in quality.
In fact, there’s only one analyst on the AVGR ticker, and that analyst rates the stock a Buy with a price target of $2.50 per share. That price target suggests that there’s potential for gains in multiples here.
Nonetheless, it’s never a good idea to blindly follow the opinions of any experts, including analysts. Instead, these opinions should be used as a source of validation for your own, well-researched, investment decisions.
Risks to Consider Before Buying AVGR Stock
If you’re considering sinking money into AVGR stock, it’s important that you consider the risks. After all, there’s no such thing as an investment that doesn’t come with risk. Some of the most significant risks to consider include:
- Capital. Avinger is far from profitable. As a result, the company has to survive using the money it has in the bank. If it’s unable to do so, it will likely look to public markets as a way to raise funds, leading to dilution of existing shareholder value and likely significant declines.
- Penny Stock. AVGR is a penny stock. As a result, the stock is subject to high levels of volatility. While this volatility is fun on the upside, it can be painful on the downside. As such, penny stocks should only be on the list of experienced investors and traders.
- Speculation. An investment in AVGR is a speculative bet. The company is young and its business model hasn’t been fully proven, hence the lack of profitability. Speculative bets can lead to big gains, but they can also lead to painful losses.
Although there are risks to consider before buying into Avinger, the stock is clearly an exciting opportunity for the masses this morning. As the retail investors continue to dive in and push the shorts out, demand for the stock, one that’s in short supply, will continue to increase, which could lead to further significant gains.
All in all, AVGR is one for the watchlist.