Support.com (SPRT) Stock: A Short Squeeze In Play

Support.com, Inc. (NASDAQ: SPRT) is headed for the top in the market this morning after a recent cool off period sent the stock tumbling. As has been the case as of late, the strong gains aren’t the result of news released by the company. So, what’s going on?

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Retail Traders Push For A Short Squeeze

Support.com is a software support company that provides services to businesses and consumers. It’s also a heavily shorted stock. 

Since the beginning of the year, we’ve watched as heavily shorted stocks like AMC, BlackBerry, Bed Bath & Beyond, GameStop, and several others grabbed the attention of retail traders looking to stick it to short selling hedge funds. 

As a result, it has been the year of the short squeeze, with squeeze after squeeze leading to tremendous runs for the top; and Support.com fits cleanly in that category. 

More than half of the company’s float is sold short, setting the stage for tremendous gains should a short squeeze take place. However, that’s not the only reason retail investors are targeting the stock for a squeeze. 

SPRT trades with a public float of under 10 million shares. That’s an ultra-tiny float, and yet another reason retailers may want to push for a short squeeze. 

After all, when a squeeze happens, short sellers race to buy shares to cover their positions and cut the bleeding, which increases demand for the ticker. However, with under 10 million shares of the stock available to the public, it doesn’t take much buying to tip the scales of supply and demand. 

That’s why stocks with very small floats tend to see the biggest movements in the market, especially when a short squeeze takes place. 

So, not only is SRPT a great target for retail investors due to the heavy short volume on the stock, but the tiny float makes significant gains within reach. 

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Final Thoughts

Retail investors have been riding the short squeeze bandwagon for some time, and it’s an exciting ride. After all, stocks like GameStop and AMC have seen gains in multiples as squeezes played out. 

Considering the heavy short volume and ultra-low float, recent gains in the stock could just be the beginning as retailers continue to pile in. 

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