Troika Media (TRKA) Stock Surged 28%. Is This a Short Squeeze?

The Troika Media Group Inc (NASDAQ: TRKA) stock price surged 28.3% premarket, driven by massive investor interest. The company’s share price has alternated between gains and losses over the past few days, and sellers and buyers have been fighting for control.

Over 33.04 million Troika shares had changed hands at the time of writing as retail investors piled into the stock, pushing it higher. Troika could be setting up for a massing short squeeze, as evidenced by its stock price rising to massive heights and then crashing, as seen on the price chart below.

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Retail investors are clamouring for a piece of Troika Media after the company was placed on the US Securities and Exchange (SEC) Short Sale Restriction List to prevent investors from shorting its stock after falling over 10% during a single trading day. 

Troika shares fell 39% on Tuesday after releasing its financial results for the past six months. The company revealed that it generated $5 million in pretax earnings missing its previous target of $27 million, driven by the acquisition of Converge Direct LLC.

When Troika acquired Converge Direct LLC in March 2022, the acquisition promised to add $300 million in revenues to Troika’s topline and at least $21 million in profits to the company’s bottom line. However, this was not the case, as evidenced by the latest six-month earnings results. 

In late February, Troika hired Jeffries to help optimise its capital structure while exploring strategic alternatives to boost its balance sheet and cash flows. The battle between the bears and bulls is based on speculation regarding whether Troika will have to raise cash soon.    

The bears are betting that Troika will have to raise cash soon by issuing shares, which would dilute existing shareholders triggering a further drop in its share price. On the other hand, the bulls are betting that Troika could unlock new revenue streams and boost its cash flows after hiring Jeffries. Hence, it will not need to raise cash. 

The battle between the bulls and bears could continue, and we will likely see a short squeeze as retail investors look to punish institutional short sellers. 

*This is not investment advice.  

Troika Media (TRKA) stock price. 

The Troika Media (TRKA) stock price was up 28.3% to trade at $0.44, from Wednesday’s closing price of $0.34.