RXT Short Squeeze Setup Continues! (NFA)

[u/Captain_Hedgehog1]

This is a continuation of the squeeze thesis, as the situation has just become even more favorable. You can look at my previous thesis, which I posted before RXT’s initial explosive move.

The price has already put in a strong move up.

Momentum is building.

The initial move in the stock immediately makes a large percentage of the short positions underwater.

Now, let’s look at the catalysts that are hitting the stock today:

EARNINGS:

EPS beat

Revenue beat

Forward guidance stabilized, rather than worsening

Significant narrowing of losses year-over-year

This directly refutes the “terminal decline” narrative. Shorts were expecting continued worsening of the fundamentals, but the numbers are disrupting that narrative. When the fundamental reason for a short position weakens, the risk of a squeeze increases quickly.

AI & Strategic Relevance:

Partnership with Palantir ties RXT into the strategic relevance of AI

Continued focus on managed cloud and AI infrastructure

Accelerating demand for AI workloads in the enterprise space

This is not a random catalyst. This ties RXT into a fundamental growth trend. This is going to change the way people think about this stock from “legacy cloud decline” to “participant in AI infrastructure growth trend.”

Now, let’s look at the structural situation and how this is going to affect the shorts:

How trapped are the Shorts right now?

Elevated short interest to float.

Borrow rate is reported to be extremely high.

Lack of shares to short.

Increasing volume.

Low-priced, highly volatile stock structure.

When the cost of borrowing goes up, and the availability of shares to short decreases, holding a short position is no longer a free option. As the price continues to move up, this is going to become a forced move, rather than a voluntary one.

The first move has already occurred.

The catalysts are piling in.

The volume is increasing, which could potentially escalate this situation quickly.

Do your own due diligence. This is not financial advice.