MarketWatch Site Logo A link that brings you back to the homepage. .mwA1{fill:#ffffff;} .mwA2{fill:#4db74d;} Home Markets U.S. & Canada MemeMoney MemeMoney Opinion: Some squeeze-loving retail investors are being cautious about all those shorts on Longeveron Published: Nov. 23, 2021 at 6:02 p.m. ET By Thornton McEnery The last time Reddit noticed short interest on a stock that was 120% the float, it did not end quietly Reddit “Apes” are debating whether to play the squeeze. GETTY IMAGES Email icon Facebook icon Twitter icon Linkedin icon Flipboard icon Print icon Resize icon Referenced Symbols LGVN -38.94% OCGN -3.56% PHUN -0.30% GME -13.59% AMC -5.04% It’s never fair to paint all retail investors with the same brush, but it’s also rather fair to say that pretty much all retail investors love themselves a short squeeze. But in the case of a little-known biopharma stock Longeveron LGVN, -38.94%, many retail “Apes” on social media are looking at a short-squeeze opportunity that appears perhaps too good to be true…or too short to be squozed? Longeveron shares began to rocket upward last Thursday after the company announced the Food and Drug Administration had given the green light for its drug Lomecel-B to be used in the treatment of Hypoplastic Left Heart Syndrome, a congenital heart defect in infants that affects roughly 1,000 babies every year. Advertisement That rather narrow use-case upside had a much larger effect on the stock price, which gained more than 850% over three torrid days of trading going into Tuesday. The heavily shorted stock also benefited from — you guessed it! — increased social-media chatter. But as we’ve come to learn from the last few months, not all meme-stock momentum is as authentically viral as it might first appear. In fact, because Longeveron is so niche and the market cap is so small, many investors on Reddit saw the initial move higher, and many posts about it, as “shilling” or” spamming,” terms that Reddit Apes use to denote bad actors playing with the power of meme stocks to create one out whole cloth. “Spam doesnt work, just stop,” moaned ArlendmcFarland on subreddit r/Shortsqueeze in response to a post pitching LGVN as a huge short-squeeze candidate before the market’s open on Tuesday. Retail investors have also become sensitive to biopharma plays after meme round-trips on stocks like Ocugen OCGN, -3.56%, among others. They are also more generally cautious about squeezing super-small-cap outfits like they did most recently with Phunware PHUN, -0.30%. Still, some posts on Reddit showed a pretty…uniquely thought-out case for squeezing Longerveron. “LGVN – 110% SHORT INTREST – 3 SHORT SQUEEZE SIGNALS – 100% UTILIZATION – COST TO BORROW WENT TO 450% INCREDIABLE 2.7MILLION FLOAT – all in maybe squeeze harder then yesturday” postulated user michaeldaversa999 Tuesday morning. Advertisement After Tuesday’s bell, however, those concerned about piling into LGVN looked prescient. Shares in Longeveron closed down 38.9% on Tuesday after falling as much 47.5% on the day. But the short sellers might have overplayed their hand. According to data from Ortex, which made the rounds on social media close to Tuesday’s closing bell, the short interest on Longeveron had surged to almost 120% of the free float, a number that brought to mind the heady days of GameStop GME, -13.59% in January, and prompting retail investors to ponder how short sellers can once again short more shares than are available without creating synthetic shares or naked shorting. To be fair, Longeveron has a comparatively tiny float, with a market cap of just under $330 million even after its recent massive gains, so it’s a pretty narrow battlefield, but the 120% was just too much for some to ignore. In the first few minutes of after-hours trading on Tuesday, volume on Longeveron stood at 11 million shares, already easily exceeding the stock’s daily average, signaling that options action on the tiny biopharma play had fully caught fire, pushing the stock up more than 3% in 5 minutes before it tanked once again. Advertisement But while we fully expect some meme-ish skirmishing in LGVN shares on Wednesday, even the most squeeze-thirsty Apes are looking at the stock and thinking: “Worth buying back into lgvn?” asked user u/JonMorrison85 around midday Tuesday. “Looks like it’s formed a good bottom here. Trying to decide if I should jump back in or not. Still has huge potential.” Fellow Apes preached caution. “Idk? I’m going to sideline this one until I see a good entry, too much potential to tumble back to sub $15 so I’ll wait it out,” responded kaitrix22. And one thing meme squeezers might want to take into account on Wednesday is that they’re dealing with the first real holiday market week since January’s squeeze. That potential lack of widespread retail investor engagement as U.S. markets prepare for Turkey Day, was visible in shares of ur-meme AMC Entertainment AMC, -5.04%, which fell more than 5% after trading just over half of its average daily volume. And GameStop fared even worse on Tuesday, closing down 13.6% after trading volume appeared to fall off a cliff after a chaotic open and falling short interest. All in all, the pre-holiday hum around meme stocks is setting up a very intriguing pre-Thanksgiving humpday. Read Next Barron's: XPeng Earnings Beat Estimates. That Wasn’t the Biggest Surprise. The Chinese electric-vehicle maker reported a third-quarter loss of 15 cents a share from $888 million in sales. Wall Street was looking for 18 cents on sales of $789 million. More On MarketWatch Oil prices end higher after U.S. Strategic Petroleum Reserve release Oil bounces as reports indicate Biden, OPEC+ near showdown over crude reserves Barron's: Rivian Stock Is Giving Up Its Gigantic IPO Gains. Blame Ford and Tesla. Here are the stock market’s trading hours for Thanksgiving and Black Friday About the Author Thornton McEnery Thornton McEnery is a markets and money writer at MarketWatch and is based in New York. Advertisement Advertisement Partner Center Most Popular No matter your age, here’s how to tell if your finances are on the right track Will Biden administration releasing 50 million barrels of oil lower gas prices? 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