Why FaZe Holdings Stock Skyrocketed Today
Shares of FaZe Holdings (NASDAQ: FAZE) are skyrocketing on Monday, in what seems to be an attempt by retail investors to create a short squeeze. The company only recently went public and has low trading volume and relatively high short interest, which can be a recipe for a short squeeze. As of 10 a.m. ET today, FaZe stock was up 16% after being up as much as 43% earlier in the session.
FaZe is a digital entertainment company that's popular in the video game space, and it officially went public via a special purpose acquisition company (SPAC) on July 20. However, the merger agreement was announced all the way back in October. And ever since the announcement, short interest has been rising steadily with investors who are betting against FaZe stock. They started short-selling shares of the acquiring company, anticipating the day it would merge into FaZe stock.
According to official data from Nasdaq, less than 200,000 shares of FaZe were sold short prior to the SPAC merger announcement. But there were 1.2 million shares sold short as of June 30. With roughly 73 million fully diluted shares, this represents less than 2% short interest, which isn't particularly high.
Source Fool.com
