Blackberry shareholders get a taste for what might be in store

A short squeeze sent First Solar’s shares soaring yesterday. The same fate could await Blackberry holders.

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Yesterday, at its analyst day in New York, First Solar (NASDAQ:FSLR) released full-year 2013 guidance that sent the company’s stock rocketing higher.  The stock registered a +46% surge that was chalked up to a massive short squeeze.

According to Capital IQ, First Solar entered Tuesday with an outstanding short position of 18.4 million shares or 21.1% of shares outstanding.  That position was reduced by 2 million shares over the course of the day and closed out at 16.4 million (19% of shares outstanding).

Back in September, First Solar’s outstanding short position peaked at 31.9 million or 36.6% of shares outstanding.  Since, this position has obviously been reduced and the stock has surged by about 75%.

Thought this was about Blackberry

Although they operate in very different businesses, Blackberry (TSX:BB,NASDAQ:BBRY) and First Solar do share at least one thing in common.  In recent times, they have both been given up for dead by many an investor as indicated by the short interest in both companies.

When we last checked in mid-March, Blackberry’s short position stood at 147 million shares or 28.6% of shares outstanding.  It now stands at 29.7%.  Not the 36% that First Solar registered, but still growing steadily and certainly more than First Solar’s pre-Tuesday short interest.  IF Blackberry is able to give a convincing indication in the coming months that it’s going to survive, as First Solar did, the short squeeze that will occur is going to act like rocket fuel for the company’s stock.  Just like First Solar.

Though the shares could rip higher, Blackberry continues to be nothing more than a gamble and should be treated as such.  However, Canadian investors deserve to own great businesses and the U.S. market is home to some of the best in the world.  We have created a special FREE report that identifies 3 U.S. businesses that are worthy of your hard-earned investment dollars.  Simply click here to receive “3 U.S. Stocks Every Canadian Should Own” – FREE!

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Fool contributor Iain Butler does not own shares in any of the company’s mentioned.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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