On Friday, electric vehicle startups such as Nikola (NASDAQ:NKLA) and Lordstown Motors (NASDAQ:RIDE) are poised to continue a remarkable rally in share prices, propelling these financially strained companies towards substantial weekly gains.
The impressive winning streak comes without any apparent news or catalyst for the companies, leading analysts and traders to speculate about a possible squeeze in these heavily shorted stocks.
Nikola, for example, has experienced a remarkable 100% increase in value over the course of this week. Refinitiv reports that it currently holds a short interest of 15.7%. Similarly, other significant gainers like Lordstown and Workhorse Group have short interests of 15.2% and 24.3%, respectively.
The surge could help Nikola overcome the risk of being delisted. The company late in May received a notice from Nasdaq as its share price had been below the $1 minimum level for the past 30 days. The stock was up by almost 20% pre-market on Friday, bringing share prices to $1.65 and on course to stay above the minimum level for the third straight session. The stock will regain compliance with Nasdaq's norms if it trades above $1 for 10 consecutive business days.
The rally coincides with Tesla’s (NASDAQ:TSLA) record-breaking 13-day win streak. As the dominant market leader in the EV industry, Tesla’s stock movement often influences other companies in the sector.
Shares of NKLA and RIDE are up 17.14% and 9.03% respectively, while TSLA is up 0.80% in pre-market trading on Friday.