What occurred
Shares of United Pure Meals (NASDAQ:UNFI) completed up 11.4% right now as the corporate introduced a renegotiation of its time period mortgage and in addition appeared to profit from a short squeeze because it was certainly one of a number of closely shorted shares that jumped right now.
So what
United Pure Meals, a grocery wholesaler for chains like Entire Meals, stated this morning that it had repriced its senior secured time period mortgage facility, which diminished its rate of interest by 50 to 75 foundation factors on $1.8 billion in debt due in 2026. That may save the corporate roughly $9 million to $13 million, and reveals its debt profile is enhancing with lenders.
Picture supply: Getty Photographs.
Whereas that information is a step in the best route for UNFI, it appears unlikely to have pushed the replenish double digits. As an alternative, a widespread quick squeeze that started with Gamestop and has moved on to different shares appears to have helped carry United Pure Meals shares right now.
UNFI inventory completed final month with a 3rd of the float bought quick, making it ripe for a brief squeeze. Buying and selling quantity was additionally double its regular stage right now, and the inventory rose by an identical quantity yesterday on no information, displaying that this was the second day of the quick squeeze.
Now what
UNFI shares have been on a tear since Jan. 11, practically doubling since then despite the fact that there’s been no main information out on the inventory. That appears to point an prolonged squeeze flushing out quick sellers.
The meals wholesaler was already a pandemic winner, benefiting from a spike in demand for groceries as eating places have been restricted, and the inventory practically doubled in 2020. Quick sellers appear to imagine that these beneficial properties are fleeting, however current occasions out there are proving that it is unwise to wager on shares to fall. The squeeze may proceed, particularly if different shares like Gamestop proceed to rise.
