FingerMotion, Inc. (NASDAQ: FNGR), a Singapore-based mobile services and data company, is making waves in the financial markets as its Cost to Borrow (CTB) has skyrocketed to an astonishing 167%, according to data from ChartExchange.
This dramatic surge, coupled with a recent “Strong Buy” rating from analysts and significant bullish bets by retail investors through call options, has fueled speculation of an impending short squeeze.
As short sellers face mounting pressure, retail investors are positioning themselves to capitalize on what could be a volatile upward move in FNGR stock.
Let’s dive into the dynamics driving this phenomenon and what it means for FingerMotion and its shareholders.
Understanding Cost to Borrow (CTB) and Its Implications
The Cost to Borrow (CTB) represents the annualized fee that short sellers must pay to borrow shares of a stock to sell them short.
A high CTB, like FingerMotion’s current 167%, indicates that borrowing shares is extraordinarily expensive, often due to limited share availability or high demand from short sellers.
This metric is a critical indicator for investors, as it can signal potential pressure points for those betting against the stock.
When the CTB surges to such extreme levels, it creates a costly environment for short sellers.
They must pay substantial fees to maintain their short positions, which can erode their profits or even lead to losses if the stock price doesn’t decline as anticipated.
For FingerMotion, the 167% CTB suggests that short sellers are facing significant financial strain, especially if the stock begins to rise.
This pressure can force short sellers to cover their positions by buying back shares, which in turn drives the stock price higher—a phenomenon known as a short squeeze.
A short squeeze occurs when a heavily shorted stock experiences a rapid price increase, often triggered by short sellers rushing to exit their positions.
The buying frenzy to cover shorts amplifies demand for the stock, pushing prices even higher and creating a feedback loop that can lead to dramatic gains.
Retail investors, aware of FingerMotion’s high CTB, are increasingly optimistic that such a squeeze could be on the horizon, especially given recent bullish developments.
Analyst Upgrades: A “Strong Buy” Bolsters Confidence
Adding fuel to the bullish sentiment, FingerMotion recently received a Strong Buy rating from analysts, as reported on April 23, 2025.
According to the report, Benchmark analysts initiated coverage with a $5.00 price target.
This optimistic outlook is based on FingerMotion’s innovative business model and its growth potential in the mobile services and data analytics sectors.
FingerMotion operates a mobile payment and recharge platform in China, offering services such as data plans, subscription plans, mobile phones, and loyalty points redemption.
The company also provides value-added services, including cloud solutions for corporate customers and its proprietary Sapientus platform, which delivers data-driven insights for industries like insurance, healthcare, and financial services.
Analysts see FingerMotion’s focus on 5G infrastructure and rich communication services (RCS) as key drivers of future growth, particularly in the rapidly expanding Chinese market.
The “Strong Buy” rating has galvanized retail investors, who view it as validation of FingerMotion’s long-term potential.
Combined with the high CTB, this analyst endorsement has heightened expectations that short sellers may soon be forced to cover, triggering a squeeze that could push FNGR stock significantly higher.
Retail Investors Bet Big with Call Options
Retail investors are not sitting idly by—they’re making bold moves to capitalize on FingerMotion’s potential.
Investors have placed massive bets on FNGR through call options, signaling strong confidence in an imminent price surge.
Call options give investors the right to buy shares at a predetermined price, and heavy buying activity in these contracts often indicates expectations of a sharp upward move.
The surge in call option activity reflects retail investors’ belief that FingerMotion’s high CTB and positive analyst coverage could create a perfect storm for a short squeeze.
By purchasing call options, investors are positioning themselves to profit from a rapid increase in FNGR’s stock price without needing to buy shares outright.
This speculative activity further amplifies market interest in FingerMotion, putting additional pressure on short sellers who are already grappling with the exorbitant borrowing costs.
Recent posts on X highlight the growing buzz among retail investors.
For instance, a user noted that approximately 724,000 shares were shorted on May 6, 2025, following days of heavy shorting activity, with the CTB jumping nearly 30 points to 85.4% before reaching the current 167%.
This data underscores the intense shorting pressure on FNGR and the escalating costs for those maintaining short positions.
How a High CTB Could Trigger a Short Squeeze
The mechanics of a short squeeze are straightforward but powerful.
When a stock like FingerMotion has a high short interest (the percentage of shares sold short relative to the total float) and a high CTB, short sellers face a precarious situation.
If the stock price begins to rise—due to positive news, analyst upgrades, or speculative buying—short sellers may start to incur losses.
To limit these losses, they must buy back the borrowed shares to close their positions, a process known as covering.
This covering activity increases demand for the stock, driving the price higher and potentially triggering a cascade of further covering by other short sellers.
The higher the CTB, the more expensive it is for short sellers to hold their positions, making them more likely to cover at the first sign of upward momentum.
For FingerMotion, the 167% CTB is a clear signal that short sellers are under immense pressure, and any catalyst—such as strong earnings, new contracts, or continued retail buying—could ignite a squeeze.
Historical examples of short squeezes, such as GameStop (GME) and AMC Entertainment (AMC) in 2021, illustrate the potential for explosive gains in such scenarios.
While FingerMotion’s market cap and trading volume are smaller than those of GME at its peak, the combination of high CTB, analyst support, and retail enthusiasm creates a similar dynamic.
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FingerMotion’s Recent Developments and Market Position
FingerMotion’s recent activities further bolster the case for bullish sentiment.
In December 2024, the company raised approximately $4.44 million through a registered direct offering, issuing 3,333,336 shares and warrants at $1.50 per share.
The proceeds are intended for general corporate purposes and working capital, signaling FingerMotion’s commitment to scaling its operations.
Additionally, FingerMotion announced contracts to equip emergency response vehicles with its Advanced Mobile Integrated Command and Communication Platform (C2 Platform), enhancing communication capabilities for various agencies.
This development, reported on January 23, 2025, highlights the company’s diversification into high-value technology solutions beyond its core mobile payment business.
The company’s strategic initiatives, analyst backing, and the extreme CTB suggest that short sellers may have underestimated FingerMotion’s resilience.
Retail investors, emboldened by the “Strong Buy” rating and the potential for a squeeze, are betting that FNGR can defy its detractors.
Also Read: Hedge Funds Are Now Turning On Their Own Private Lenders
Risks and Considerations for Investors
While the prospect of a short squeeze is enticing, investing in FingerMotion carries risks too.
The stock’s high volatility (weekly volatility of 13%) and lack of profitability raise concerns about its long-term stability.
Moreover, the recent direct offering has diluted existing shareholders, with 3,333,336 new shares issued at a 25% discount to recent trading prices.
If the warrants are fully exercised, further dilution could occur, potentially capping upside gains.
Retail investors should also be cautious about the speculative nature of short squeezes.
While a squeeze could drive significant short-term gains, the stock’s price may retreat once the covering subsides, leaving latecomers at risk of losses.
Proper risk management, such as setting stop-loss orders or using limit orders, is essential for navigating FNGR’s volatile price action.
When in profit, take profits.
Also Read: Hedge Fund Now Freezes Ability For Customers To Withdraw Money
A Powder Keg for a Short Squeeze?
FingerMotion’s Cost to Borrow surging to 167% has set the stage for a potential short squeeze, with retail investors eagerly anticipating a breakout.
The combination of a “Strong Buy” rating from Benchmark, heavy call option activity, and relentless shorting pressure creates a volatile mix that could propel FNGR stock to new heights.
As short sellers grapple with exorbitant borrowing costs, any positive catalyst—whether it’s strong earnings, new contracts, or sustained retail buying—could force them to cover, triggering a rapid price surge.
However, investors must tread carefully.
FingerMotion’s lack of profitability, recent dilution, and inherent volatility make it a high-risk investment.
While the prospect of a short squeeze is alluring, thorough due diligence and risk management are critical for those looking to join the fray.
For now, FingerMotion remains a stock to watch, as retail investors and short sellers engage in a high-stakes battle that could reshape its trajectory.
FNGR stock is currently trading at $3.16 at the time of this writing.
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Good to hear the facts on fngr!!!
Welcome FNGR shareholders 🤝