It appears that retail traders, particularly those that identify as part of the Reddit congregate, have found yet another meme stock stock of short squeeze interest.
Clean Energy Fuels (NASDAQ: CLNE), a California-based company focusing on collecting and transporting natural gas produced from animal waste at dairy farms, surged by nearly 40% come Wednesday morning, as meme stock proponents and Redditers fixated onto the stock’s short interest. In fact, Clean Energy’s stock has already jumped by more than 20% over the past week, despite the company not releasing any meaningful news to explain the sudden volume.
Indeed, the recent momentum in the cow flatulence-focused stock appears to be herded by a short-squeeze attempt among retail traders. Although Clean Energy has not garnered the kind of interest that has rocked GameStop and AMC, the animal waste-collecting company has caught the attention of some naysayers. According to S3 Partners managing director Ihor Dusaniwsky, Clean Energy has a market cap of $2.7 billion, of which 11 million shares— or 8.35% of its total float— is currently being shorted.
In just the past week alone, the stock’s short interest has risen sharply alongside its share price, as short-sellers bought over 400,000 shares totalling $4 million. Now, short-sellers are out $21 million since last week. “Although the recent losses have made the stock more ‘squeezable’, shorts are not exiting their positions in size at the moment,” Dusaniwsky explained. “CLNE has a 55 out of 100 in our Squeeze Risk Score Metric, meaning that there is a strong potential for a squeeze, but the pressure to buy-to-cover has not become overwhelming yet.”
Over the past several weeks, Clean Energy has begun to issue more stock to investors. On May 10 and then again on June 7, the company announced a ‘at-the money raise,” which allows it to sell stock at current market prices. Clean Energy successfully made $200 million through the two fundraising initiatives, causing its share count to jump by over 10% relative to its base as of April 30.
Information for this briefing was found via Barron’s and Clean Energy Fuels. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.