MicroVision, Inc. (NASDAQ: MVIS) has had a strong run in the market over the past few trading sessions, and that run is continuing today, with gains of more than 10% in the premarket hours. While there’s been no press releases or SEC filings that would act as a catalyst for the gains, there’s a good reason for the movement.
We’re seeing messages across the Wall Street Bets subReddit, the same social platform that led to tremendous short squeezes in GameStop and several other stocks. The message volume here seems to be continuing as we move closer to the company’s financial report, which is expected to come out Thursday, April 29.
Here’s what’s going on:
Why Wall Street Bets Members Are Chatting About MVIS Stock
As mentioned above, the recent news in the value of MicroVision stock seems to be closely related to all the chatter we’re seeing on Wall Street Bets and social media from retail investors. But why would retail investors be chatting about the stock so much?
It all boils down to the reason for the first big short squeeze we saw earlier this year in GameStop stock.
For some time now, hedge funds and other institutional investors have been making millions by taking out heavy short positions in stocks. When these short positions are accumulated, the shares involved in them are immediately sold onto the open market, flooding the market with supply and driving the price of these stocks down.
Of course, that’s what the hedge funds want to see. After all, a short position only becomes profitable if the stock falls.
Then again, retail investors are getting tired of this legal form of market manipulation and are making concerted efforts to reverse the direction by acting as a team and buying tremendous amounts of shares. In doing so, these retail investors are pulling the extra supply out of the market, forcing prices to go up, and forcing hedge funds and other big-money investors out of their positions.
That seems to be what’s going on with MicroVision stock. According to finviz, the short percent of the float on the stock sits at just over 19%. That’s an incredibly high short interest, suggesting that should retail investors push the stock high enough to scare the shorts out of their positions, a massive squeeze is possible.
After all, when prices move up, those who shorted the stock race to buy shares to cover their positions in order to stop the bleeding. This leads to significant increases in both volume and the price of the stock.
MicroVision Reports Earnings Soon
While the gains we’ve seen from MicroVision as of late have been impressive to say the least, the short squeeze could speed up significantly in the next few days.
Recently, MVIS announced that it would be reporting its financial results on Thursday, April 29. At the moment, analysts expect the company to report a loss of $0.02, which is exactly the same as the loss we’ve seen over the past three consecutive quarters.
If the company is able to beat these expectations, the buying will likely intensify, leading to movement in the upward direction that’s significant enough to push the shorts out of their positions.
So, if you’re in the stock at the moment, earnings will be an incredibly important event to follow.
The Bottom Line
The bottom line here is simple. MVIS stock has been under attack by short sellers for some time. However, the bulls are coming out to play and the battle wages on.
Should the stock continue moving in the upward direction, shorts will continue to lose money, and eventually, a massive short squeeze is likely. All-told, if you’re not paying attention to MicroVision yet, you could be missing out on what may become one of the biggest moves of the year.