Kaixin Auto Holdings (NASDAQ: KXIN) is flying in the market today, trading on well over 40% gains early on. With no news out of the company via press release or SEC filing, many are wondering why the stock is moving. Here’s what’s going on:
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KXIN Stock Runs For The Top In A Short Squeeze
Quite a bit of the volume on Kaixin Auto Holdings stock has been short volume. While this has been a painful reality for some time, the bulls seem to be taking control in a short squeeze this morning, sending the shorts racing to cover.
As mentioned above, there has been no news from the company via press release, SEC filing, or otherwise. So, it’s difficult to pin down the catalyst that started the short squeeze. Nonetheless, there’s no denying the big gains in KXIN stock today.
Biden May Have Something To Do With It
Across message boards, especially in terms of Chinese stocks, we’re seeing quite a bit of conversation surrounding the fact that Joe Biden will be the next President of the United States. Keep in mind, under the Trump Presidency, the United States and China have been the central forces in the midst of a global trade war.
Many point to the idea that the Joe Biden Administration will reverse much of the conflict, leading to an improved economic state in China. That’s great news for KXIN.
Let’s not forget, Kaixin Auto Holdings is China’s largest used car dealer. The fact of the matter is that when consumers are concerned about economic conditions, they are not quite as likely to make big purchases, such as the purchase of a new or used car.
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The Bottom Line
At the end of the day, Kaixin Auto Holdings is a major player in the used car space in China. With Joe Biden coming into office, there’s a strong chance that the Chinese economy will benefit, leading to increased demand for used cars, and ultimately significantly improved revenue at KXIN.
As a result, the bulls seem to be jumping on the stock, scaring the bears out of their shorts. All in all, it’s a great day for KXIN stock!
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