[EDITOR’S OPINION]

Is SolarBank (NASDAQ: SUUN) The Next Short Squeeze?

Disseminated on behalf of SolarBank Corporation

SolarBank Co. (NASDAQ: SUUN) is potentially standing on the edge of a market opportunity.

Short interest has shot up 130.3% in just seven days, as traders and hedge funds double down on their bet against the stock.

But have these short sellers made a mistake?

Because when too many shorts pile on and momentum shifts due to changing sentiment, the results can present a market opportunity.

For those unfamiliar, short interest refers to the percentage of a company’s shares that have been borrowed and sold by investors who believe the stock price will decline. These traders, known as short sellers, profit if the stock price falls because they can buy back the shares at a lower price and return them to the lender, pocketing the difference.

However, if the stock price moves against them, short sellers are forced to buy back shares at higher prices to close out their short positions, which can create what is known as a “short squeeze”.

The higher the short interest, the more fuel there is for a potential squeeze… and right now, there is growing short interest in SolarBank (NASDAQ: SUUN).

Market participants will no doubt be familiar with the most high-profile short squeezes. GameStop. AMC. Tesla.

A large short interest plus a fundamentally strong company are the ingredients necessary for a potential short squeeze.

And SolarBank has just spent the past weeks releasing updates on positive corporate developments.

Wall Street Is Underestimating SolarBank

While short sellers were busy stacking up their positions, SolarBank was out making deals that are continuing its growth trajectory.

On March 27, 2025, SolarBank announced the development of a 7.2 MW DC ground-mount solar power project known as the Hoadley Hill Rd Solar Project in New York. This community solar project is expected to power approximately 850 homes, providing clean energy to local residents.

The project has completed its Coordinated Electric System Interconnection Review (CESIR) and is moving forward with site permitting.

Just a week earlier, on March 20, 2025, SolarBank secured approval from the New York State Energy Research and Development Authority (NYSERDA) for $1.06 million USD in incentives for the 3.26 MW Camillus Solar Project under the NY-Sun Program.

This project, which was sold to Solar Advocate Development LLC in a transaction valued at $7.3 million USD, underscores SolarBank’s ability to attract significant investment and government support for its initiatives.

Additionally, on March 18, 2025, SolarBank announced the development of the 4.3 MW Glen Rd Solar Project in New York, expected to power approximately 500 homes. This project further demonstrates the company’s commitment to expanding its footprint in the renewable energy sector and providing sustainable solutions to local communities.

These developments are not isolated incidents.

SolarBank (NASDAQ: SUUN) has a robust pipeline of projects, including the 14.4 MW projects in Skaneateles, New York, announced on February 11, 2025, which are anticipated to power around 2,100 homes.

The company is also evaluating an expansion into the data center market, a sector projected to reach $395 billion by 2030, positioning itself as a developer and strategic partner providing renewable energy solutions in this rapidly growing industry.

Major wins.

Direct revenue streams.

Reasons why the short sellers could find themselves on the wrong side of this trade.

Will The Tide Turn on The Short Sellers?

The pieces are all in place. Short interest is at high levels, but SolarBank is not a struggling company.

SolarBank’s execution strategy continues in motion, signing deals, securing investments, and expanding at speed.

If the continued momentum translates into the market, short sellers are left with only one option. They have to buy back shares at increasing market prices. This is how a potential short squeeze occurs.

History Has Shown Us What Could Happen Next

Tesla shorts experienced a short squeeze when the company proved its doubters wrong.

In early 2020, Tesla was one of the most shorted stocks on the market, with billions of dollars in bets against it. At the start of that year, Tesla’s stock was trading at around $86 (split-adjusted). Short sellers were convinced the electric vehicle maker was overvalued, burning cash, and destined to fail.

But then Tesla started delivering record-breaking sales, turning profitable, and expanding into new markets like China.

As Tesla’s fundamentals strengthened, its stock began to surge upward. By July 2020, it had tripled to over $275 per share, forcing short sellers to cover their positions at increasingly higher prices.

Then came the knockout punch. Tesla announced a stock split on August 11, 2020, igniting a retail investor frenzy and sending the stock price soaring.

By the end of 2020, Tesla’s share price had skyrocketed to over $700 per share (split-adjusted), wiping out billions from short sellers’ pockets.

The losses were so devastating that by early 2021, Tesla shorts had collectively lost over $40 billion.

GameStop and AMC sent hedge funds into meltdown mode when retail investors capitalized on their greed.

Of course, these are all larger companies and there is no certainty that a short squeeze will occur at SolarBank. However, SolarBank (NASDAQ: SUUN) is making moves to create the potential for a short squeeze. It has millions in fresh capital fueling its expansion. It has real, tangible assets generating revenue right now.

And it has an increasing number of short sellers who could be forced to buy back shares at any price if momentum shifts. The market thinks this stock is heading lower, but history tells us this may not be the case.

As always, any investment in SolarBank should be based on the review of its publicly disclosed documents and an understanding of its business, including understanding the risk factors associated with SolarBank. The occurrence of a short squeeze is speculative and should not be the basis for an investment decision alone.

Disclaimer:

There are several risks associated with the development of the projects detailed in this report. The development of any project is subject to the continued availability of third-party financing arrangements for the project owners and the risks associated with the construction of a solar project. There is no certainty the projects disclosed in this report will be completed on schedule or that they will operate in accordance with their design capacity. In addition, governments may revise, reduce or eliminate incentives and policy support schemes for solar power, which could result in future projects no longer being economic.

This report contains forward-looking information. Please refer to the SolarBank press releases entitled: “7.2 MW Hoadley Hill Rd Solar Project in Development by SolarBank in New York”; “$7.3 million USD Transaction Entered into with Solar Advocate Development LLC for the Sale and Construction of the Camillus Solar Project”; “$1.06 million USD in Government Incentives Awarded to SolarBank for Camillus Solar Project”; “4.3 MW Glen Rd Solar Project in Development by SolarBank in New York”; and “SolarBank Provides Update on 14.4 MW Projects in Skaneateles, New Yor” available on SEDAR+ at www.sedarplus.ca, for additional details on the statements, risks and assumptions

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