Is a Giant Short Squeeze Brewing in Novavax (NVAX) Stock?

Core Viewpoint - Novavax's stock has experienced significant volatility, with a recent surge of over 300% year-to-date, driven by market reactions to its upcoming vaccine updates and high short interest among investors [1][2][6]. Group 1: Stock Performance - Novavax shares jumped 18% on June 5 and another 20% in pre-market trading, opening at $24.10 per share, resulting in a market capitalization of approximately $3.6 billion based on 2023 revenue of $656 million [1][2]. - The stock had previously fallen below $10 in 2023 after losing the race to deliver vaccines compared to competitors Pfizer and Moderna [3]. - The stock is currently trading significantly above its fundamental value, even after recent positive news [5]. Group 2: Market Sentiment and Short Interest - Over 36% of Novavax shares are currently held short, with more than half of these trades occurring off listed exchanges, indicating a bearish sentiment among some investors [6]. - The sentiment on platforms like Stocktwits has turned bullish, with traders viewing the high short interest as a potential for further stock price increases, although some caution against quick profit-taking [12]. Group 3: Vaccine Development and Regulatory Updates - The FDA is updating recommendations for new Covid-19 vaccines, which has contributed to Novavax's recent stock surge, as the agency aims for vaccines to cover the JN.1 lineage [8]. - Novavax announced plans to deliver an updated Covid-19 vaccine in September, which will not utilize mRNA technology, differentiating it from competitors [10].