IMAC Holdings Inc (NASDAQ: IMAC) is screaming for the top in the premarket hours this morning, with gains in multiples. The gains coma after the company announced an acquisition. Moreover, with an ultra-tiny public float and heavy short interest, the positive news seems to have triggered a short squeeze. Here’s what’s going on:
IMAC Stock Flies On Acquisition
In the press release, IMAC Holdings said that it acquired Lockwood Chiropractic in Webster Groves, MO. As its name suggests, Lockwood Chiropractic is a chiroractic clinic. The clinic has been serving its community since 1990 and has historically generated six figure revenues.
IMAC explained that the purchase of Lockwood Chiropractic assets will assist in the expansion of its Ozzie Smith Center brand with an established community near down town St. Louis. Moreover, Sharon Whalen, D.C., will join the company’s team and continue to run the clinic in Webster Groves.
In a statement, Matthew Wallis, COO at IMAC, had the following to offer:
The addition of the Lockwood clinic provides us with better access to St. Louis patients and is a turn-key opportunity, as the existing infrastructure and existing staff will deliver an immediate and seamless transition. Concurrently, our existing Ozzie Smith Center in St. Louis may help us to grow the Lockwood center and provide our services to an even wider patient base outside that city. The Lockwood acquisition is an excellent model for our expansion strategy to partner with successful clinic owners with a loyal clientele. We believe that this is an excellent example of managing cash outlay while expanding our patient base.
The News Triggered A Short Squeeze
Prior to the news released by IMAC Holdings, the company was primed for a short squeeze. Based on the company’s tiny public float of just over 7 million shares, and heavy 50%+ short interest, the stock was wound up and held down like a spring. With the weight lifted off of the spring by the news, the stock is screaming for the top.
Keep in mind, trading short squeezes can be a tricky, and very risky, endeavor. At the end of the day, the stock has the potential fall just as fast as it gained. On the other hand, for those that know how to play a short squeeze, the gains may be far from over in this move.
The Bottom Line
The bottom line here is simple. IMAC Holdings made an acquisition that will drive six figure revenues in the company. Considering recent declines, the tiny public float and the incredibly high short interest, it only makes sense that the news triggered a short squeeze.
While this is an exciting move, beginner investors and traders should be careful trading short squeezes as they can lead to fast-paced significant gains or losses, with losses being a very real, yet often unexpected outcome. Nonetheless, if you know what you’re doing, there still may be plenty of room for big profits out of IMAC stock.
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