What happened
Shares of Camber Energy (CEI +0.00%) jumped 18.4% on Tuesday, as investors on social media sites ramped up their bets on the power solutions company.
So what
Camber's majority-owned subsidiary, Viking Energy Group, owns interests in oil and gas fields in Texas, Louisiana, and Mississippi that collectively contain more than 145 active wells. Camber is also expanding into sustainable energy solutions to diversify its business and profit from the growth of alternative fuel sources.
Its stock is up a staggering 722% since it struck a deal with ESG Clean Energy on Aug. 24 to secure an exclusive license for its patented carbon-capture system. The system uses waste heat to capture nearly all the carbon dioxide emitted from internal combustion engines. In this way, it's designed to produce clean electricity without any efficiency losses.
"In my view, this transaction positions us as an industry leader in terms of being able to assist with the power generation needs of commercial and industrial organizations while at the same time helping them reduce their carbon footprint to satisfy regulatory requirements or to simply follow best ESG practices," Camber CEO James Doris said when the deal was announced.
Shares of Camber Energy have soared over the past month. Image source: Getty Images.
Now what
Yet while this technology is intriguing, Camber's meme stock status is also contributing to its recent stock price gains. The company has become popular among traders on Twitter and other social media sites. With nearly a quarter of its stock sold short as of mid-September, according to Yahoo! Finance, many of these traders have identified Camber as a potential short-squeeze target. By bidding up its share price, they hope to force short sellers to close their positions.
This forced buying on the part of the bears can accelerate a rally in a heavily shorted stock's price. However, once a squeeze ends, the stock's upward price movements can quickly reverse -- and investors who buy late into the rally can suffer brutal losses.
