Update: Uranium Firm USEC Up 700 Percent in Two Weeks

Joe Goldman |

Shares of USEC (USU) , a small uranium company, traded higher for the 11th consecutive day on Friday. Shares spiked over 50 percent during the trading session and are up over 700 percent since July 9.

The most bizarre aspect about USEC’s trading activity is that the stock has moved astronomically higher on no news. The company hasn’t announced earnings, an acquisition, or anything else of significance.

To address the suspicious activity, USEC released a statement on July 22, but gave zero clues as to why shares are trading with such insanity. “The company stated that its policy is not to comment on unusual market activity,” read the statement. The company has remained silent since that date.

Traders, however, believe that the stock’s meteoric rise is a textbook example of a short squeeze. This occurs when a rapid gain in a stock forces short sellers (traders betting on the stock to lose value) to cover their bets in order to avoid further losses. This effectively acts as buying the stock, so the effect is compounded and often continues until all of the shorts are “squeezed.”

“It looks like as more people became aware of [the rally], the fast money got involved and proliferated the squeeze,” Frank Davis told Reuters earlier this week. Shares are up 65 percent since Davis’ comments, but his thesis likely remains the same at this point in time.

USEC announced in June that its “Megatons to Megawatts” program, which intends to convert 475 metric tons of weapons-grade uranium into fuel for use in nuclear power plants, was 95 percent complete as of June 24. The company also completed a 1-25 stock split on July 1. This news, however, is probably unrelated to the short squeeze.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
ERGN Ergo Science Corp 8,000.00 0.00 0.00 0


Emerging Growth

MGX Minerals Inc.

MGX Minerals is a diversified Canadian mining company listed on the Canadian Securities Exchange. MGX is engaged in the acquisition and development of industrial mineral deposits in western Canada that…

Private Markets


The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…

Santo Diablo Mezcal

Santo Diablo Mezcal has been created to capitalize on a boom sector of the beverage market currently full of many small unmemorable products by producing one sexy, household, easily recognizable…