It's a brutal day for sandwich chain Potbelly Corp (NASDAQ:PBPB), with the stock down 23.6% to trade at $11.19. Earlier, the shares tagged an intraday low of $10.95 -- the lowest price on record for PBPB.
This freefall -- which comes on the heels of PBPB's disappointing preliminary earnings report last night -- has landed the stock on the short-sale restricted list. In other words, today's sell-off hasn't been exacerbated by an uptick in shorting activity.
Prior to this morning, bears had taken a keen interest in PBPB, with short interest up 6.6% during just the most recent reporting period. Short interest now accounts for 26.1% of the stock's float, and it would take 10.6 trading days for all of these bearish bets to be covered.
Meanwhile, the equity's post-earnings plunge has left its 14-day Relative Strength Index (RSI) hovering around 15 -- well into oversold territory. If any short sellers decide to take some profits on PBPB in the wake of today's drop, the shares could enjoy some modest upside in the very short term. In fact, the stock now has plenty of room to rally before encountering resistance at its 10-week moving average.
However, any bounce in PBPB in the days ahead would likely be of the "dead cat" variety. With the company predicting soft sales for the remainder of the fiscal year, and the long-term technical picture revealing a steady downtrend, a meaningful recovery for Potbelly Corp doesn't seem to be in the cards just yet.
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