Tootsie’s rolling stock was caught in the short-lived frenzy of these days coordinated by hundreds of retail traders via Reddit channels such as WallStreetBets, effectively pushing stock by 12% during a high volume session.
Tootsie Roll Industries (TR), a company that produces candies, chocolate bars and other sweets, saw its trading volume increase nearly ten times the daily average on Monday and Tuesday while yesterday a total of 7 , 2 million shares traded hands, about 70 times. the average daily volume of the stock before the onset of the short-squeeze mania.
According to data from S3 Partners, Tootsie Roll’s short stake was 46%, making the stock one of the highest-selling stocks in the United States. stock Exchange, while based on its daily trading volumes, it would take around 23 days for short sellers to fully hedge their position.
This means that a short squeeze for Tootsie Roll may take some time to unfold based on an assumed daily volume of 326,100 shares, although daily volumes may vary if long-term holders decide to dump. their actions in response to the rise.
Since the start of this move, Tootsie Roll shares are up 43.5% while they are up 0.9% so far in today’s pre-market stock at 43. $ 24 per share.
Tootsie Roll is said to be one of the latest in a growing list of stocks that are being pressed by retail traders as part of a coordinated effort to force the hand of institutional investors who are under pressure to close their short positions, making thus go up the price. higher in a context of temporary supply shortage.
What’s next for Tootsie rolling stock?
If the advance of the Tootsie rolling stock were to continue in the following days, short sellers will likely fold their positions to reduce their losses, either by choice or as part of the automatic execution of stop-loss orders.
So far, around 9 million shares have traded hands in the past three days – around 55% of the share’s free float – while it is not known how many of those shares have been bought by sellers at. discovered who may have already hedged their positions.
The fact that the price found itself at the lower end of the session’s trading range suggests that there were many sellers who were willing to sell their shares in response to the surprising rise, while the The future of the share price will largely depend on whether those shares were bought by those who were short or if they were bought by those who pulled the short squeeze.
The following days would determine if the short-squeeze still has room to continue or if the short sellers reacted more quickly than they expected. GameStop type situation.