Is a bull trap being set up?
$Faraday Future Intelligent Electric Inc.(FFIE)$
With no major news substantiating the impressive gain nor material improvement in its business outlook or operations that would justify the jump, I'm of the opinion that it is the result of short-squeeze traders taking advantage of the recent plunge in the stock price of Faraday Future to push its stock price higher. With a small market capitalization of merely $24 million after having crashed over 99% last year and having garnered attention from the meme stock community, the EV maker is becoming a prime target for short-squeezing.
However, these stock price actions do nothing to help the deteriorating balance sheet and worsening outlook of Faraday Future. I believe that its rebound in stock price will be short-lived. It will be just a matter of time before reality returns to its stock price movements and fundamentalists regain control from the short-squeeze speculators.
For me, I would avoid Faraday Future and other meme stocks for that matter, as I would rather invest in fundamentally strong companies which I believe will be around for decades.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
