Dogness Corp (NASDAQ: DOGZ) is screaming for the top in the market this morning. However, if you’re looking for press releases or SEC filings that act as the catalyst to the move, well, you’ll be hard pressed to find anything. There has been no news.
Nonetheless, the stock seems to be screaming for the top in a coordinated effort by retail investors to squeeze the shorts out of their positions as the war between Wall Street Bets Redditors and hedge funds continues on. Here’s what’s happening:
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- Retail Investors Send Dogness Skyward
- What Is Dogness?
- Risks to Consider Before Buying DOGZ Stock
- Final Thoughts
Retail Investors Send Dogness Skyward
As mentioned above, DOGZ stock is screaming for the top in the market this morning without any clear catalyst as to why. Nonetheless, there’s a good reason for the gains.
For about a month now, retail investors have been waging war on hedge funds that short stocks, sending prices down for their own gain. By banding together and buying shares, the massive group at Wall Street Bets is pushing hedge funds out of their positions, sending volume skyrocketing and leading to extreme price appreciation in stocks like Gamestop, Nokia, BlackBerry, and now Dogness.
It makes sense too.
DOGZ saw a more than 400% increase in short interest over the past month, and with such heavy short positions, any major buying in the stock has the potential to send it skyrocketing. Moreover, the stock trades with an ultra-tiny float. Only about 20 million shares are available to trade.
With such a small float, supply of shares is minimal. At the same time, with the Wall Street Bets guys all over the stock, demand is high. As such, the short squeeze in DOGZ stock could go quite a bit further than what we’re seeing right now.
What Is Dogness?
Dogness is a global pet supply company. The company manufactures collars, leashes, toys and several other products geared toward pets.
Headquartered in China, DOGZ is taking advantage of the emerging markets trend that we’ve been seeing on Wall Street. Nonetheless, it doesn’t just sell its products in China. In fact, the company markets and ships its products all around the world.
Risks to Consider Before Buying DOGZ Stock
If you’re thinking about buying DOGZ stock, or any other stock for that matter, it’s important that you consider the risks. After all, regardless of the investments you make, risk will always be a factor. When it comes to DOGZ, the most significant risks include:
- Emerging Markets. First and foremost, Dogness is located in China, a quickly emerging economy. While investing in emerging markets is exciting at the moment, it’s also a very risky play as these markets tend to hit bumps in the road, and when they do, significant declines can happen.
- Profitability. DOGZ is not a profitable company. As a result, the company has to rely on the money it has in the bank to survive. If that’s not enough, it may look to capital markets as a way to raise funds, leading to dilution for existing shareholders and potentially significant declines.
- Penny. Finally, Dogness is a penny stock. As a result, the stock experiences high levels of volatility, which could result in significant losses as high levels of volatility make timing entrances and exits difficult.
While there are risks to consider, it’s impossible to argue the fact that retail investors are getting behind Dogness stock right now, and as we saw with GameStop, Nokia, and several other stocks, when retail investors band together, stock prices move dramatically.
All in all, this is yet another massive short squeeze in a war waged between David, or a group of Davids, and Goliath; and clearly, the Davids are winning!