It hasn’t exactly been a good start to the year for FuelCell Energy (NASDAQ:FCEL), as shares of the company have shed 21% year-to-date (YTD), bringing its year-over-year (YOY) loss to 66%. Meanwhile, FuelCell has remained quiet, with its last press release published on Dec. 19 detailing its fourth-quarter and 2023 full-year earnings.
The firm’s last company-specific U.S. Securities and Exchange Commission (SEC) filing was posted on Jan. 4. The filing disclosed that FuelCell had agreed to an amendment with its lender regarding a term loan facility for a maximum of $80.5 million and a letter of credit facility for a maximum of $6.5 million.
During the fourth quarter, revenue fell by 43% YOY to $22.5 million from $39.2 million. On the bright side, gross loss totaled $1.5 million compared to $15.2 million a year ago, while net loss per share improved to 7 cents from 11 cents. For the full year, revenue declined by 5% to $123.4 million while net loss improved to $108.1 million from $147.2 million.
CEO and President Jason Few stated that he was “very pleased” with the yearly results. However, shareholders seem to disagree, as FCEL stock is down by over 15% since the results were published.
FCEL Stock Short Squeeze Metrics
Short squeezes are a popular topic for declining stocks. Let’s take a look at the metrics behind the thesis for FCEL stock.
As of Dec. 31, there were a total of 83.59 million shares of FCEL sold short with a combined value of $133.74 million. As of Dec. 29, FuelCell’s short interest as a percentage of float tallied in at 18.56%, up by 5.58% month-over-month. Generally, a short interest of 10% is perceived as high while a short interest of 20% or greater is viewed as very high.
Another short squeeze factor to take into account is the cost to borrow (CTB) fee. This fee represents the annual fee that short sellers must pay to borrow shares. The fee rises when short seller demand is high and falls when it is low.
According to Fintel, FuelCell currently has a cost to borrow fee of 0.62%. That’s compared to the average CTB fee for a stock between 0.3% and 3%. As a result, it isn’t that expensive right now to short sell FCEL.
FCEL stock commands a high short interest, although this data is presented with a lag. With the decline in FCEL this year, short interest could be lower as short sellers take their profits. Furthermore, FuelCell’s CTB fee isn’t that high, which doesn’t support the potential for a short squeeze.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
