Tanger Factory Outlet Centers Inc. (NYSE: SKT) is headed up in the market this morning, but the company hasn’t issued any news via press release or SEC filing. So, what’s the deal?
It seems as though the group at Wall Street Bets is eyeing the stock as a short squeeze target, and the gains we’re seeing at the moment could just be the beginning. Here’s what’s going on:
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- Wall Street Bets Eyes Tanger Factory Outlet Centers
- This Short Squeeze Could Go Far Higher
- What Analysts Think About SKT Stock
- Risks to Consider Before Buying SKT Stock
- Final Thoughts
Wall Street Bets Eyes Tanger Factory Outlet Centers
As mentioned above, Tanger Factory Outlet is screaming for the top in the market this morning, but with no news, many investors are scratching their heads wondering why. Well, the answer is simple.
In today’s market, you don’t need news, you just need retail investor attention.
Over the past several weeks, the group on the Wall Street Bets Reddit has shown Wall Street just what retail investors are capable of when they band together. We saw dramatic climbs in stocks like GameStop, Express, and several others.
Now, it looks like SKT stock is the next target, and it makes sense.
At the moment, the stock trades with a short volume ratio of 21%. That’s incredibly high, and when stocks tick up, those who are short are forced to buy shares in order to cover their positions, or accept extreme losses. This sends volume through the roof and makes for some serious price appreciation in a move known as the short squeeze.
This Short Squeeze Could Go Far Higher
The fact of the matter is that the short squeeze we’re seeing at the moment could just be the beginning of the run. After all, Wall Street Bets Redditors have sent much bigger targets flying much higher.
In this particular case, SKT isn’t just trading with high short interest, the stock has under 90 million shares in its public float. That may seem like a lot, but the fact of the matter is that 90 million shares is ultimately a pretty short supply.
As the stock ticks up and shorts race to cover their positions, demand for shares will continue skyward. Of course, as the law of supply and demand tells us, when demand rises on something with minimal supply, the price of the high demand asset must rise. So, hang onto your hats, this could become a very wild ride.
What Analysts Think About SKT Stock
Analysts aren’t the biggest fans of SKT stock. In fact, there are only three analysts on Wall Street covering the stock and all three rate it a Hold. While there are no Sell ratings, there’s also no Buy ratings to speak of.
Price targets rate from $10 to $14, with a median target of $11.50, representing the potential for a nearly 40% downside. Nonetheless, that’s what Wall Street Bets wants to see. A stock with little by way of confidence among institutions that’s heavily shorted. These types of stocks make the best short squeezes.
Risks to Consider Before Buying SKT Stock
Before you dive into Tanger Factory Outlet Center stock, it’s important to think about the risk involved. After all, any investment you make will come with the risk of loss. When it comes to SKT stock, the most significant risks include:
- Volatility. SKT stock is known for generating quite a bit of volatility. While that’s fun on the upside, it can be painful on the downside, leading to significant losses in a short period of time.
- Short Squeeze. It’s also worth mentioning that while it’s fun to watch short squeezes, playing in these games can get very dangerous. Ultimately, these moves send stocks far higher than fair market value, and if you get in too late, profit taking could commence, resulting in significant losses.
Sure, there are risks to consider, but there’s also a huge potential reward here. Again, we’ve seen what Wall Street Bets Redditors can do when they band together behind a short squeeze target.
With the message boards lighting up and the masses on Reddit and other social platforms getting involved, there’s no telling just how high SKT stock will fly.