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Revisiting the wild swings of 2021, one can’t help but notice the resurgence of meme stocks and the fervent discussion surrounding the next short-squeeze candidate. Canoo (NASDAQ:GOEV) is currently basking in this short-squeeze limelight, witnessing a remarkable surge of over 30% in afternoon trading today.
This dramatic movement seems closely intertwined with Canoo’s core fundamentals. A trifecta of soaring retail investor interest, a modest share price facilitating cheaper options bets, and soaring short interest has set the stage for talks of a potential squeeze.
According to data from Fintel, Canoo’s short interest has skyrocketed to 13.5%, leaving short sellers scrambling to locate sufficient shares for short selling.
With these pivotal factors in mind, it’s imperative to delve into the additional catalysts propelling GOEV’s ascent – and question whether a squeeze is indeed brewing for this beleaguered electric vehicle (EV) stock.
The Driving Force Behind the Surge
Undoubtedly, the narrative of a short squeeze is a significant driver in today’s trading frenzy. However, another crucial catalyst has investors on high alert. Canoo recently secured approval for its Oklahoma facility to be classified as a Foreign Trade Zone (FTZ).
In a press release, Canoo proudly announced the U.S. Department of Commerce’s designation of its facility as a FTZ, marking a pivotal accomplishment that paves the way for enhanced unit profitability and the potential for accelerated breakeven.
This designation essentially eradicates customs duties on vehicles exported overseas, with Canoo emphasizing that the majority of its parts are domestically sourced. The company anticipates saving approximately 5% on imported parts globally, further fueling its quest to achieve breakeven status expeditiously.
While this catalyst is undeniably noteworthy, the market’s harsh treatment of GOEV stock underscores broader challenges this company has faced. Despite the significance of this milestone, today’s surge likelys stems more from technical and speculative factors rather than this fundamental development.
Nevertheless, all these facets warrant careful observation – a task that investors are diligently undertaking. Canoo remains a top focus for traders and investors in the days ahead, beckoning keen scrutiny. I am certainly among those keeping a close eye on this intriguing saga.
Disclosure: Chris MacDonald does not hold any positions in the securities mentioned. The opinions expressed in this article solely belong to the author, following the InvestorPlace.com Publishing Guidelines.
