Heavily shorted Insignia Systems tracks best month since 1991 on retail buying spree
30/12/2021 15:58
By Bansari Mayur Kamdar
Dec 30 (Reuters) - U.S. media and digital solutions firm
Insignia Systems extended its month-long rally into the final
hours of December, setting itself up for the best month in
decades, as retail investors scooped up shares of the heavily
shorted micro-cap company.
Insignia ISIG.O added nearly 20% on Thursday as of 0322
GMT and has gained more than fivefold in December, heading for
the best monthly performance since its debut in 1991.
The company has surged 130% so far this week, but the jump
still pales in comparison to a 319% weekly rise in early
December when it said it was exploring strategic options.
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Insignia currently tops Fintel's leaderboard used to track
companies that have the highest likelihood of experiencing a
short squeeze, while analytics firm S3 Partners estimates a
short interest of 63.6% on its free float.
The Minneapolis-based company is among the top trending
companies on investor-focused social media Stocktwits.com and
also the third-most ordered stock by individual Fidelity
investors, according to Fidelity Research.
Stocks with high short interest have been in spotlight this
year, ever since individual investors coordinating on online
message boards helped fuel stunning rallies in shares of
companies such as AMC Entertainment AMC.N and GameStop GME.N
and cost short sellers billions of dollars. urn:newsml:reuters.com:*:nL4N2SZ3CD
Over the past thirty days, the short interest in Insignia
rose by 543,000 shares, worth $6 million, said Ihor Dusaniwsky,
managing director of predictive analysis at S3 Partners. There
was slight short covering last week with 16,000 shares worth
$182,000.
"It has to be long buying," said Dusaniwsky. "This is a
stock with a small market cap, small float and tiny amount of
borrows available – there will be virtually no new short selling
in this stock due to lack to stock loan supply."
Insignia had 1.77 million shares outstanding and a market
capitalization of $40.7 million as of Dec. 29, Refinitiv data
showed.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Alden Bentley and Aditya Soni)
((BansariMayur.Kamdar@thomsonreuters.com;))