Yunhong CTI Ltd (NASDAQ: CTIB) is flying in the market this morning, trading on gains of more than 50% early on. However, if you’re looking for the catalyst, you’ll be hard-pressed to find any press releases or SEC Filings. So, what’s the deal?
The gains seem to be a coordinated effort by retail investors to cause a short squeeze. Here’s what’s happening:
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- Retail Investors Push for a Short Squeeze in Yunhong CTI
- What Is Yunhong CTI?
- Risks to Consider Before Buying CTIB Stock
- Final Thoughts
Retail Investors Push for a Short Squeeze in Yunhong CTI
As mentioned above, Yunhong CTI stock is flying in the market this morning on gains of more than 50%, but the gains are leaving many scratching their heads. With no clear catalyst in press releases or SEC filings, many are wondering just why the stock is climbing.
The gains seem to be the result of retail investors banding together to cause a short squeeze.
Over the past several weeks, we’ve seen it time and time again. It started when Wall Street Bets Redditors waged a war on Hedge Funds by pushing a short squeeze in GameStop, Nokia, and several others.
Now, retail investors are putting their strength behind CTIB, and it makes sense.
The short interest on CTIB isn’t only high, it has been climbing lately. Moreover, short squeezes are most effective on stocks with small public floats, and that’s exactly what we see from this stock.
At the moment, the public float on Yunhong CTI stock is just 3.39 million, meaning that the supply of shares is very short. So, when the stock starts to tick up and shorts run to cover, the supply of shares simply can’t keep up with demand, which results in a dramatic rise in value, suggesting that the gains we’ve seen so far this morning are just the beginning of this run.
What Is Yunhong CTI?
Yunhong CTI is a company focused on the development and commercialization of technology for flexible film. The company has been in business for 30 years, offering custom films, foil novelty balloons, latex balloons, custom flexible packaging, and consumer storage products.
Risks to Consider Before Buying CTIB Stock
Before diving into CTIB Stock, it’s important to consider the risks. After all, there’s no such thing as a risk-free investment. When it comes to Yunhong CTI, the most significant risks to consider include:
- Penny Stock Risks. CTIB is a penny stock. As a result, the stock is subject to large amounts of volatility, which can be fun on the upswing, but very painful on the downswing. Moreover, high levels of volatility make it difficult to time entrances and exits.
- Profitability. Yunhong CTI is not a profitable company. As a result, it depends on the money it has in the bank. If that’s not enough to help it reach profitability, dilutive offerings may come down the line.
- Short Squeezes Are Dangerous. Finally, short squeezes are exciting moves as compelling gains can be created over a very short period of time. However, if you don’t time the move right, you could end up holding the bag as everyone else takes profits, leading to significant losses.
At the end of the day, there’s no news here. Yunhong CTI is the same business, doing the same things. However, investors are excited about the fact that short interest is high and the public float on the stock is ultra-tiny, leading to the potential for tremendous gains as this short squeeze takes hold. While it’s a risky play, there could be quite a bit more room for gains ahead.