We are working in a late-stage bear market context right now, which means, as the old pros used to say, bears are an endangered species and tend to get shot on sight. In other words, anything with lots of short interest has a squeeze target painted on it.
We saw this in striking detail earlier this year with the now legendary squeezes in GameStop Corp (NYSE:GME), BlackBerry Ltd (NYSE:BB), and AMC Entertainment Holdings Inc (NYSE:AMC).
In that spirit, we would invite attention on For The Earth Corp (OTCMKTS:FTEG) and Caduceus Software Systems Corp (OTCMKTS:CSOC), two very similar stories that could be primed for some squeeze action.
Caduceus Software Systems Corp (OTCMKTS:CSOC)
CSOC was a left-for-dead ticker on the OTC until December, when the stock took off to the upside. The company has started to get current with filings and seems to be locked in on a reverse merger candidate that could suddenly embody this ticker with a commercial-stage business driving real revenues.
The company just announced that it has selected a final candidate from among the various candidates that were being considered. According to the release, the target company satisfies a profile that the CSOC management team and board used to guide the search.
That profile includes: Revenues and Assets exceeding a total of 5M$; Projected revenues of over 15M$ for 2021; Expansion and scalability are key; Potential and eligibility for up listing to NADSAQ/NYSE; and Recession & Market proof industries.
According to the release, “Caduceus has been in discussions with the candidate for some time. However, given the existing confidentially agreements in place, the acquisition target candidate cannot be named as of yet. Nonetheless, based on the current status of our negotiations and due diligence, we are confident an LOI will be produced very shortly. The target company is located in the state of California and has products currently being sold in the US and Canadian Markets with further orders to fulfilled at a future date through large retail chain stores.”
In addition, OTCshortreport.com shows CSOC shares to be overwhelmingly popular among active bears, with over 15 million shares of short-side transactions over the past few days making up almost 75% of all transactions in the stock over that period.
For The Earth Corp (OTCMKTS:FTEG)
FTEG is a similar story. This left-for-dead ticker has been perking up as well. While the company hasn’t put out any press releases encouraging speculation on a merger, the signs are there.
One of the main signals is the recent rush of filings being disclosed to bring the company up to “current” status. The company also hired an independent lawyer to review documentation and submit a Sufficiency of Adequate Current Information letter to OTC Markets Group.
This is often something done ahead of the announcement of a reverse merger and a new entity gaining control of the stock.
In addition, over the past 20 days, over 54% of all transactions in the stock have been shorts at work according to OTCShortReport.com. The vast majority of days during that period have been dominated by shorts betting against the stock. Given the pace of filings, we could be near a more manifest signal from the company about the potential for a merger announcement, which could spark a major squeeze.