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New Age Beverages seen vulnerable to a short squeeze, says S3 Partners

The company used to sell tea and water, but recently said it was ready to launch cannabis-based drinks
New Age drink
New Age Beverages engages in the development, marketing, sales, and distribution of beverages.

New Age Beverages Corp (NASDAQ:NBEV), which has been swept up in the craze over cannabis stocks this year, has nearly 60% of its shares shorted and could be vulnerable to a squeeze in the coming days, a report by analytics company S3 Partners said on Thursday.

New Age has 11.55 million shares that are short, accounting for 55.8% of the float, the report by S3 published on the site Short Sight said.

"With such a high percentage of actively traded shares sold short currently, NBEV (New Age Beverages) is a candidate for a potential squeeze," the report said.

The company sells tea and water, but it recently announced it was ready to launch cannabis-based drinks.

READ: Cannabis frenzy whipsaws shares of New Age Beverages and DAVIDs TEA despite skimpy news

Bearish speculators have increased their short exposure significantly over the past 90 days, specifically since the last earnings call, a recent share placement, and has teased about its plans to enter the high-flying marijuana business, igniting the interest of short sellers.

The shares have rallied over 200% since mid-September, with the next highly anticipated earnings call scheduled for next week. 

Shares of New Age were trading 4.7% lower at $4.84. On October 1, they closed at the session peak of $8.95.

New Age Beverages engages in the development, marketing, sales, and distribution of beverages. The company offers ready to drink (RTD) tea, RTD coffee, kombucha, energy drinks, relaxation drinks, coconut waters, functional waters, and rehydration beverages, as well as functional medical beverages.

The company is based in Denver, Colorado.

Reporting by Rene Pastor, contactable on [email protected]

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