Collective Audience, Inc. NASD:CAUD has copped a pounding from the naked shorts since debut earlier in the week.
Collective Audience, Inc. has issued 3,762,000 of its common stock to Logiq, Inc. in connection with the business combination. Logiq declared a special dividend distribution of the 3,762,000 shares of Collective Audience common stock to Logiq stockholders. Certain brokerage firms have prematurely or erroneously credited their client’s accounts with the dividend distribution of the Collective Audience shares. Logiq is investigating the matter and plans to pursue corrective measures and remedies.
So those sales are in fact shorts that will need to be covered; this is a buy.
Collective Audience, Inc. (Nasdaq:CAUD), a leading provider of digital consumer acquisition solutions, announced its common stock has commenced trading today on the Nasdaq Global Market under the new ticker symbol – CAUD.
The commencement of trading on Nasdaq follows the completion of the business combination involving DLQ, Inc., a former subsidiary of Logiq, Inc (OTCQX: LGIQ) and with Abri SPAC I, Inc. (previously traded on Nasdaq as ASPA, ASPAW, ASPAU), a special purpose acquisition company, which Abri.
The newly combined company was renamed Collective Audience, Inc. to reflect its innovative performance marketing platform which has been designed to identify, convert and monetize the collective audience of leading brands and publishers.
A short squeeze occurs in the financial markets when there is a rapid increase in the price of a stock or other asset that has been heavily shorted. Short selling is a strategy where investors borrow shares of a stock and sell them with the expectation that the price will fall, allowing them to buy the shares back at a lower price and profit from the difference.
In a short squeeze, the opposite happens. If the price of the heavily shorted asset starts to rise, short sellers may face increasing losses. To limit their losses, short sellers may need to buy back the borrowed shares to cover their positions. However, as more short sellers rush to buy the shares, this increased demand can further drive up the price.
This creates a feedback loop where rising prices force more short sellers to cover their positions, leading to even higher prices. It’s called a “squeeze” because short sellers find themselves squeezed between increasing losses and the pressure to buy back shares at higher prices.
Key elements of a short squeeze:
- High Short Interest: A significant portion of the stock’s float (the total number of shares available for trading) is sold short.
- Positive Catalysts: Unexpected positive news or events surrounding the stock can trigger a surge in buying interest.
- Forced Covering: As the stock price rises, short sellers face increasing losses, and to limit those losses, they buy back shares, contributing to the upward momentum.
- Feedback Loop: The buying pressure from short sellers covering their positions fuels further price increases, creating a self-reinforcing cycle.
Short squeezes can lead to sharp and volatile price movements, catching both short sellers and other market participants off guard. Traders and investors closely monitor short interest levels and market dynamics to identify potential short squeeze opportunities or risks.
Shayne Heffernan
