Carver bancor (CARV) a short squeeze story

Summary

  • Will Meade, a former hedge fund manager has tweeted to his 200,000 followers on Twitter that CARV has a massive short interest of 68% on June 28. The tweet said ‘’$CARV is now the most shorted stock trading with a whopping 68% short interest! Short sellers picking on Carver Bancorp, one of the largest African American-owned banks. I’m long, let’s make shorts pay.’’
  • Lenders like Carver have come into focus over the past year as an estimated $150 million in equity capital has been invested in Black-owned banks since George Floyd was murdered last year, according to the National Bankers Association, a trade group that represents 24 of the country’s minority-owned financial institutions, CNN Business reported last month.
  • Today during the pre-market hours, the stock has been moving nicely and is now 15% up showing a strong trading strike for four days in a row.
  • It is important to mention that during this time last year, short interest in Carver Bancorp hovered around 15%. This means that the short interest has grown more than 50% during the past year.

 

When did everything begin with Carver Bancorp Inc (NASDAQ: CARV)?

Will Meade, a former hedge fund manager has twitted to his 200,000 followers on Twitter that CARV has a massive short interest of 68% on June 28. The tweet said ‘’$CARV is now the most shorted stock trading with a whopping 68% short interest! Short sellers picking on Carver Bancorp, one of the largest African American-owned banks. I’m long, let’s make shorts pay.’’

This brought many retail investors to the scene and started short squeezing the stock on Thursday. The shares of the company soared as much as 267% intraday but closed on 106%.

About Carver Bancorp Inc

Carver Bancorp is based in New York and is the holding company for Carver Federal Savings Bank which is one of the largest African American-operated banks in the U.S. The banking institution was founded in 1948.

The majority of its eight locations continue to serve customers in middle-to-low income areas. It was designated by the U.S. Treasury Department as a Community Development Financial Institutions (CDFI) for its “community-focused banking services and dedication to the economic viability and revitalization of underserved neighborhoods.”

CDFIs were among the biggest lenders in the final round of the federal government’s Paycheck Protection Program loans, making more than $34 billion in those loan this year.

Of the 4,700 banks in the U.S. that hold a combined $20.3 trillion of assets, only 21 of them are Black-owned or led, and those have total assets of just $5 billion, CNBC reported.

Lenders like Carver have come into focus over the past year as an estimated $150 million in equity capital has been invested in Black-owned banks since George Floyd was murdered last year, according to the National Bankers Association, a trade group that represents 24 of the country’s minority-owned financial institutions, CNN Business reported last month.

Today during the pre-market hours, the stocks has been moving nicely and is now 15% up showing a strong trading strike for four-days in a row.

It is important to mention that during this time last year, short interest in Carver Bancorp hovered around 15%. This means that the short interest has grown more than 50% during the past year.

Short sellers are investors who bet against a stock by borrowing its shares and selling them hoping to buy them back at a lower price. So, this is how the game goes, if the stock starts rising the short sellers can be burned by such bets that can force them to buy back the stocks at higher prices therefore, resulting in losses.

It has become an extreme go-to strategy for individual investors this year to buy stocks with high percentages of short interests after the GameStop Inc (GME) and AMC catapulting higher in January.

 

 

Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.

Natalia C. - Junior Analyst at FDGT Academy

Natalia C. - Junior Analyst at FDGT Academy

I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.

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