Marathon (NASDAQ:MARA) stock is experiencing a potential short-squeeze today as the crypto mining company surges alongside Bitcoin (BTC-USD) breaking past the significant $45,000 psychological barrier. MARA stock has risen a surprising 20% today, likely benefiting from the increase in the price of Bitcoin, the primary commodity it mines. Indeed, BTC has risen 5% over the past five trading days, recently crossing the $45,000 per coin threshold.
While the stock is likely receiving a boost from Bitcoin’s recent climb, it’s probably not the sole reason behind today’s jump. According to data from financial data site Fintel, MARA stock has a notably high short interest of 22.36%, far higher than most normal securities. This suggests that the stock’s recent surge may be the result of an ongoing short squeeze.
A short squeeze involves an organized effort to raise the price of a security as part of a plan to force those who hold short shares of said security to sell their holdings, thus pushing the stock up even more. As stock prices rise, those with short positions on the security are “squeezed” into selling as a way to avoid sometimes substantial losses.
Short squeezes have become something of a mainstay among Reddit investors, with companies like Tesla (NASDAQ:TSLA) and GameStop (NASDAQ:GME) experiencing historic rallies due to investor manipulation. The latter, in particular, saw the video game retailer climb to an all-time high of $500 per share, from just $17, purely from the effort of thousands of r/WallStreetBets investors.
While it’s difficult to determine if today’s jump falls into short-squeeze territory, MARA’s high short interest certainly strengthens the case. After today’s gains, MARA stock is still down more than 8% year-to-date, though the company is up 209% in the last 12 months.
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