Troika Media (TRKA) Stock Was Up 26.8% Premarket. What’s Next?

The Troika Media Group Inc (NASDAQ: TRKA) stock price was up 26.8% premarket despite the lack of news from the customer acquisition and marketing firm. The rally has left many wondering what’s next for the firm and if we could see another short squeeze.

Today’s rally was driven by resurgent investor interest in Troika Media, given that over 20.45 million TRKA shares had changed hands at writing. It seems retail investor interest in the firm is back, but can they trigger another rally similar to what happened at the beginning of March?

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Some analysts argue that Troika Media’s stock is significantly undervalued and should be trading at over $1.00, with a maximum range of $4.70 based on its fundamentals. Instead, the company’s shares are trading at $0.22, with a market capitalisation of $61.17 million. 

Troika’s stock price rally is driven by significant retail investor interest, which could easily translate into a short squeeze given that a large percentage of its shares are sold short by institutional traders looking to benefit from a crash in Troika’s share price. 

Troika’s stock price crash from its February 2022 high of $1.50 was precipitated by its acquisition of Converge LLC for $125 million. The company funded the deal by giving Converge $25 million in cash, issuing $25 million in restricted stock, and borrowing $75 million from Blue Torch Capital. 

The Blue Torch Capital debt triggered the share price crash as short sellers expected Troika to issue 200 million new shares diluting existing shareholders. However, Troika recently withdrew its S1-registration form with the US Securities and Exchange Commission (SEC) as it explores other funding methods.  

Troika Media enlisted the services of Jeffries Investment Bank to help it revamp its capital structure and explore alternative options that do not include an equity raise. The move triggered a massive rally in TRKA stock, as shown in the chart below.

However, the rally did not last as buyers took profits and short sellers applied more pressure on the stock. Still, retail investors could trigger another short squeeze if they continue buying Troika shares, boosting its share price. 

*This is not investment advice. 

Troika Media (TRKA) stock price. 

The Troika Media (TRKA) stock price was trading up 26.78% at $0.2263 from Thursday’s closing price of $0.1785.