Faraday Future Surges to 6-Month High Amid Short Selling Pressure

Faraday Future Intelligent Electric (NASDAQ:FFAI) surged 29.2% on Thursday morning, reaching a 6-month high. The electric vehicle maker didn't release any new press releases or SEC filings to explain the buying action. Notably, short interest in the stock has increased, with shorts feeling the heat as the stock price rises.

Faraday Future Intelligent Electric (NASDAQ: FFIE) experienced a significant surge on Thursday morning, rising by 29.2% and reaching a 6-month high. This upward movement occurred despite the absence of new press releases or SEC filings from the electric vehicle maker. Notably, the stock's short interest has been on the rise, putting pressure on short sellers as the stock price continues to climb.

As of February 15, 2025, FFIE had a short interest of 15.73 million shares, representing 22.90% of the float [1]. This figure marks a -13.95% decrease from the previous month's short interest of 18.28 million shares. The short interest ratio, also known as the "days to cover ratio," is 0.9, indicating that it would take 0.9 days of the average trading volume of 12.09 million shares to cover all short positions [1].

The increase in short interest suggests that more investors are betting against FFIE, expecting its price to decline. However, the recent price surge may indicate a shift in investor sentiment, with some short sellers facing potential losses as they attempt to cover their positions. The short squeeze phenomenon, where a stock's price appreciates rapidly, forcing short sellers to buy back shares to cover their positions, could be at play here.

Faraday Future Intelligent Electric's short interest compares to its competitors in the automobiles and trucks industry as follows: The Shyft Group, Inc. (2.93%), NWTN Inc. (0.25%), Cooper-Standard Holdings Inc. (5.51%), Innoviz Technologies Ltd. (13.52%), ChargePoint Holdings, Inc. (19.98%), Niu Technologies (2.24%), Strattec Security Corporation (3.75%), Hyliion Holdings Corp. (15.20%), Holley Inc. (4.74%), Motorcar Parts of America, Inc. (5.59%) [1].

The current short interest in FFIE is relatively high, indicating a significant number of investors are pessimistic about the stock's future prospects. However, the recent price increase suggests that some investors are now bullish on the stock. The company's ability to sustain this upward momentum will be crucial in determining the future trajectory of its stock price.

References:
[1] https://www.marketbeat.com/stocks/NASDAQ/FFIE/short-interest/