Tanger Outlets Emerges As Potential Next Short Squeeze Target
Retail REIT Tanger Factory Outlet Centers may be the latest short squeeze target among investors looking to punish — and profit from — other investors who have shorted the stock. That dynamic famously played out early this year with GameStop and, to a lesser extent, movie theater chain AMC Entertainment Holdings.
On Thursday morning, Tanger was the most trending stock in the WallStreetBets Reddit community, also known as r/wallstreetbets, a subreddit devoted to stock and option trading. It is the second-most-heavily shorted company in the market, Nasdaq reports, just behind GameStop.
Shorting stocks is a widely used investment strategy whereby an investor borrows stock and then sells it immediately. If the stock price drops, the investor buys the stock back and returns it to the lender, keeping the difference. The strategy is thus a way to bet against a particular stock.
When numerous smaller investors managed to drive up the price of GameStop very quickly in January, that obliged hedge funds that were heavily shorted on the stock to cover their positions, causing them to lose money. During the GameStop short squeeze, the retailer's shares rose roughly 1,500% in a short period, only to fall quickly, though the stock is now trading at about $120 a share, compared with $17.25 at the beginning of 2021.
After an upward price surge early in the trading day on Thursday, Tanger stock has only risen modestly, however. It ended Wednesday at $17.74 per share, about a 9% gain for that day, and as of midday Thursday traded just north of $18 per share.
Though hit hard by the coronavirus pandemic like most retail landlords, Greensboro, North Carolina-based Tanger has seen recent improvements in its business, reporting that during Q4 2020, traffic at its open-air malls was about 90% compared with a year earlier.
"Our business continues to improve, with the consumer embracing open-air outlet centers as a preferred venue for shopping and entertainment," Tanger CEO Stephen Yalof said in a statement last month.
"Rent collections for the quarter improved to 95% of billed rents as of the end of January," Yalof said. "As of that date, we had already collected 57% of 2020 rents that we allowed our tenants to defer until this year."