(Bloomberg) — Heavily shorted SunPower Corp. shares have been caught up in the meme-stock frenzy, sending the solar power company toward its biggest gain on record.
Most Read from Bloomberg
The stock of SunPower, which sells residential systems, soared as much as 86% Tuesday, to as high as $5.12, after a roughly 20% advance Monday. The California-based company has added almost $400 million in market value this week, which has seen meme-stock traders once again pile back into the stocks of old targets GameStop Corp. and AMC Entertainment Holdings Inc.
As those traders bid up SunPower stock, short sellers have increased their bets against it. Short interest in the stock climbed to almost 96% on Tuesday, according to data compiled by S3 Partners.
“My strong suspicion is this a classic short squeeze probably connected with the rest of these meme stocks,” said Graham Price, a clean-technology analyst at Raymond James. He said SunPower is an ideal short-squeeze target because it has very high short interest, along with an extremely low float because the majority of its shares are owned by TotalEnergies SE.
Read more: SunPower Moves May Be Amid Short Squeeze vs. Fundamentals: React
Other US-based solar-equipment stocks also rallied, including Maxeon Solar Technologies, Sunnova Energy International and Sunrun Inc. Price at Raymond James said the Biden administration’s move to hike tariffs on a range of Chinese imports, including solar cells, wouldn’t help SunPower because it’s no longer a manufacturer.
The firm’s shares are still down almost 10% this year. A prolonged slump in the rooftop solar business has presented serious challenges. The company eliminated more than 25% of its workforce last month. it also made plans to shutter its residential installation locations and close its direct sales unit, said it expects to incur restructuring charges of about $28 million and announced it needs to restate almost two years of financial results.
Read more: California’s Push for Rooftop Solar Panels Stalls as Jobs Vanish
The entire rooftop solar industry has been struggling, with elevated interest rates making it more expensive for people to install panels. California, the largest solar market, cut payments to homes and businesses that sell excess solar power back to the electric grid, a move that left the industry reeling.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
Signup bonus from
