Aurora Cannabis (NYSE:ACB) shareholders are probably on Cloud Nine after shares of the Canadian cannabis producer skyrocketed more than 50% on Friday and were up 94% at one point. The U.S. election results have investors more excited about Aurora than they’ve been in a very long time.
Are the good times ready to roll again for Aurora Cannabis? Don’t bet the farm on it. Here’s why Aurora’s ginormous gain could quickly evaporate.
Anatomy of a short squeeze?
Around 19% of Aurora’s outstanding shares were sold short as of Oct. 15. When there’s good news for a stock that’s so heavily shorted, short-sellers usually scramble to cover their positions. This creates significant upward pressure on the share price, resulting in what’s called a short squeeze. It really looks like…
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