“M&A speculation isn't hurting the stock,” reported Business Insider.
The market's most feared short-seller Andrew Left, founder of Citron Research is bullish on Snap and says the California-based company which offers Snapchat, could be bought within the next year.
As of June 1, short interest sat at US$1.35bn, or 21.3% of the float, according to data from financial analytics firm S3 Partners.
“Shares tanked during the month of May as short interest rose, providing the perfect "backdrop" for positive momentum on any bullish sentiment,” USAA senior equity analyst Jason Lincoln told Business Insider.
Snap shares hit an all-time low of US$10.96 on May 11 after analysts slashed their price targets after the Snapchat parent posted witheringly poor 1Q results.
They have since recouped the losses in June, and the stock up 1.9% to US$13.17 Wednesday at midday.
READ: Snap shares hit all-time low as analysts slash targets on poor 1Q results
Snap shares started climbing last week after famed Wall Street short-seller Andrew Left, founder of Citron Research, published a note Thursday saying Snap is “one stabilizing quarter from giving investors a 30% or more return – more than you can see in any FANG stock in our opinion."
"You cannot ignore the size, scale, and reach of the product which has the mindshare of the most important demographic in the market," he added.
Left also sent shorts running for cover by suggesting Snap is a plum takeover target.
"Google could easily give Snap the "grownup" it needs while also saving close to $100 million," he said. "Although we now find out that SNAP has plans for profitability in the next 12 months, we still question if it will remain independent for that long."
Snap is an attractive proposition as Snapchat gets millilenial traction with its popular multimedia short video and image sharing messaging app.