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The numbers here are honestly wild for a company this small.
Current short interest is sitting around 3.85 million shares, which is roughly 39% to 44% of the float depending on the source. That is an insanely high percentage for a low float stock. Days to cover is currently around 15 days, and at some points recently was reported over 30 to 40 days because of how low the trading volume was. On top of that, borrow fees recently pushed over 100%, meaning shorts are paying massive costs just to stay in their positions. Sources below.
What makes this setup dangerous for shorts is the float is tiny and liquidity is thin. There simply are not many shares moving around daily compared to how many are sold short. If buying pressure really starts coming in, shorts could get trapped fast.
Now here is where it gets interesting.
LFVN has a dividend coming June 1st. Shorts are responsible for paying dividends on borrowed shares. With nearly 4 million shares sold short, that creates additional pressure for short sellers holding through the dividend date. Some may choose to close before then rather than continue paying massive borrow fees plus the dividend obligation.
That June 1st dividend date could become a major catalyst because any increase in buying volume combined with shorts trying to exit could create a chain reaction upward.
The crazy thing is this is not even a bankrupt company or some random dilution machine. LFVN is still profitable in quarters, has no debt, cash on hand, and management recently increased the dividend while still maintaining a large share repurchase authorization. They also still have roughly $59 million authorized for buybacks according to recent discussions around earnings, which is massive relative to the company’s size.
A lot of squeeze plays fail because the company itself is terrible fundamentally. LFVN actually has a path toward positive earnings this year and operational improvement, especially with leadership changes and restructuring already happening. If they surprise with stronger guidance or improving numbers later this year, the short thesis could completely break apart.
Nobody knows how high a squeeze can go, but when stocks with this kind of setup catch momentum, they can move extremely fast because shorts are forced buyers on the way up. If volume really floods in, this could turn into one of those multi day runner situations people look back on wishing they got in earlier.
This is not financial advice.
Sources:
MarketBeat Short Interest Data
https://www.marketbeat.com/stocks/NASDAQ/LFVN/short-interest/
Short Interest History
https://www.shortinteresthistory.com/symbol/lfvn/
Short Interest Tracker
https://shortinteresttracker.com/stock/LFVN
Fintel Data
https://fintel.io/ss/us/lfvn