Here’s an example of why I find the Crocs Inc. (NASDAQ: CROX) short-interest story I discussed yesterday so interesting: As of 10 March, TravelZoo (NASDZAQ: TZOO) had 1.3 million shares sold short, or 38% of the stocks float. The stock price was $18. Five days ago TravelZoo reported earnings and the stock gapped up 43% and has since gained a total of 152%. This is a…
… classic short squeeze and has forced most shorts to cover themselves (i.e. buy stock back at a loss) or have their brokers do it for them (i.e. margin calls and forced liquidations). When something like this starts, the pain doesn’t stop until the forced liquidations are over. Same thing happens at bottoms, only in reverse. It makes for the ultimate entry point if you can catch the top/bottom day. Cheers!
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