Troika Media Group stock becomes latest short squeeze phenomenon
Short positions in Troika Media Group Inc stock (NASDAQ: TRKA) have surged in recent days as retail investors eye the relatively unknown marketing technology company as the next big NASDAQ short squeeze target.
The latest data from Ortex shows the company, with a tiny market cap of around US$50 million, has just over 100% of its free float sold short.
When the percentage of a company’s shares that are shorted is higher than 100%, it means shares that are borrowed for short transactions are being on-lent to a secondary short seller, such is the short demand.
But so far, retail investors who are utilizing multiple online discussion platforms in an attempt to coordinate a short squeeze, are winning out.
TRKA stock has surged by more than 60% in the past 5 days to trade above 70 cents. Troika stock recorded a single-day gain of 25% on Monday.
TRKA Stocktwits & Reddit frenzies
Ahead of the US market open on Tuesday, TRKA is the most-watched ticker on the social stock market-focussed platform, Stocktwits, with more than 1200 users watching the stock.
It is also the most actively-discussed topic – ahead of SPY, Tesla and meme stock favourite, AMC.
Likewise on Reddit, Troika Media Group Inc has surged to prominence in recent days.
According to Ape Wisdom data, which scans the most popular stock market sub reddits twice an hour, Troika stock is currently the top trending stock in the world today – with an 112% surge in interest in the past 24 hours.
So what is Troika Media Group stock?
Troika Media Group Inc is a holding company focussed on the digital marketing and creative media industries. It launched with the acquisition of a design business in 2017, followed by an experiential marketing business in 2018. Then in 2021, the company moved into the NFT space, with the launch of an NFT marketplace and technology services for NFT creators.
But the business failed to gain much traction. The TRKA share price hit a low of 9.5 cents in late 2022.
But things began to turn around for the holding company in February 2023, when it announced the acquisition of Converge Direct LLC, a digital and offline performance media and marketing company.
The acquisition came at a cost of US$125 million. It was funded with a combination of new debt financing, a restricted stock grant, and balance sheet cash.
The Coverage acquisition has seemingly been transformative for the Group.
Converge counts the likes of Hello Fresh, AT&T, Chewy.com, Wayfair, Petco, and Tommy Hilfiger as key clients.
At the time of the acquisition, Converge reported $23 million of adjusted EBITDA and approximately $21 million of net income for the year ended December 31, 2021.
Troika immediately undertook an overhaul of management, business strategy an operations, to support the growth of Coverage. The overhauls has been reported as a success, so far.
What to watch next for Troika stock
The growth of Converge will be the key thing to watch for longer-term Troika Media Group stock investors. Look out for any new major clients wins, that could be announced via news releases in the coming months.
But in the shorter term, the battle between the growing retail army of Troika stock bulls and the short sellers is the key. A break above $1 could see short sellers scramble to cover and further exacerbate the already evident squeeze.
But should the retail holders lose steam, Troika Media Group stock could come crashing down… very quickly.