GEO Short Squeeze?
17% of the shares outstanding and 33% of the float of GEO Group $GEO are short. Will it go through a short squeeze? And what will be the catalysts?
A short squeeze happens when short sellers cannot find enough shares to cover their positions and are forced to buy the shares at high prices causing the shares to go even higher.
The most famous examples of short squeezes are GameStop $GME in 2021, Volkswagen Group $VOW3.DE in 2008, and Tesla $TSLA in 2020.
GEO Group is not as heavily shorted as GameStop was, and neither is it a deep value stock. Besides, it doesn't have the same catalysts as GameStop. What can trigger a short squeeze for GEO Group is if they continue reducing their debt and decide to buy back shares. The better their balance sheet, the better will be their credit rating, and investors will be interested in the company again.
As I said with GameStop, the short squeeze should be viewed as a bonus. What's important are the fundamentals.