$LUCY A Possible Post Offering PumpStocks often run after dilution due to opportunistic investors taking advantage of a stock’s low PPS. A possible instance of this phenomenon is Innovative Eyewear, Inc. (NASDAQ: LUCY) which is currently in the midst of an offering that caused the stock to plummet 38%. Given that LUCY stock is currently trading below the offering price, the stock could be on track to rebound this week once the offering is closed on June 26. With this in mind, LUCY stock currently has high short data which could allow a short squeeze to occur. For this reason, LUCY is one to watch closely this week in anticipation of a rebound to pre-offering levels.
LUCY Fundamentals
As things stand, LUCY’s ongoing offering is expected to close on June 26 which could result in a major run. The offering is for 4.5 million shares worth $1.05 per share which in turn adds up to $4.725 million. Currently, the stock is trading below the offering price at $.93 which indicates that the stock may have a post offering pump to better reflect its value. Low PPS aside, two other compounding factors that might contribute to a potential run are LUCY’s history and its swelling short data.
The history of a stock can sometimes be a great indicator of potential runs. For example, LUCY stock has experienced two +190% runs after the stock tested its $1.37 support. One of which occurred in February when the stock ran 192% after testing that support and the other occurred in April and resulted in a 300% run after the retest. Based on this, investors could be inclined to buy shares of LUCY near the current support to capitalize on a potentially similar run.
On that note, such a run could materialize due to a potential short squeeze. In the meantime, LUCY stock has a short interest of 37.7% – a 1250.9% increase from last week – and its float on loan is 28% – also a 642.3% increase from last week. In addition, LUCY’s cost to borrow is extremely high at 306%, and its utilization rate is 91.1%. Considering that the offering is expected to close on June 26, a short squeeze could be triggered by strong buying pressure which makes LUCY stock a prime short squeeze candidate to watch this week.
LUCY Financials
According to LUCY’s Q1 2023 report, the company’s assets increased QoQ from $4.68 million to $5.11 million, yet its cash balance remained relatively unchanged only decreasing slightly from $3.5 million to $3.4 million. On the other hand, liabilities decreased QoQ from $665 thousand to $562 thousand.
In terms of revenue, LUCY suffered a significant plunge YoY from $236 thousand to $144 thousand. At the same time, operating expenses increased from $1.2 million to $1.4 million. These two compounding factors resulted in LUCY’s net loss also increasing from $1.2 million to $1.4 million.
Technical Analysis
LUCY stock is in a bearish trend and is trading in a downward channel. Looking at the indicators, the stock is trading below the 200, 50, and 21 MAs which are bearish indicators. Meanwhile, the RSI is oversold at 23 and the MACD recently turned bullish. It is also worth noting that there is a gap near $1.35 that has to be filled which was formed on the announcement of the offering.
As for the fundamentals, LUCY stock has an upcoming catalyst in the closing of its ongoing offering. Given that the stock is trading below the offering price and its high short interest, LUCY could be well-positioned to run this week once the offering closes. With the stock trading near support and the RSI oversold, the current PPS could prove to be a good entry point ahead of a potential post offering pump that could see the stock fill the gap it recently formed on the announcement of the offering.
LUCY Forecast
With the company’s offering expected to close on June 26, LUCY stock has a strong chance to witness a post offering pump given that the stock is trading below the offering price. In this way, a short squeeze could be triggered thanks to the high short data LUCY is currently witnessing. All of that makes LUCY one to keep a close eye on this week as a prime short squeeze candidate.
