Matthew Waterman
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Matthew Waterman in Brand Power,

Mattel soars 8.48% on heavy volume

Monday marked what may be a dramatic turnaround in not just the stock market as a whole, but for heavily discounted toymaker Mattel. Monday's bullish activity raised the price of Mattel by 8.48%, closing at $21.62 today.

Mattel has been one of the market's most shorted stocks this year, most recently lead by a stampeding declaration by David Zorub of Blue Mountain Capital Management, that he thought the stock could reach lows of just $10 per share.

The stock, which had declined as much as 36% over the last twelve months saw a breathtaking reversal of fortune day on more than double its average daily volume. The extremely bullish swing was likely fueled by short sellers rushing to cover their positions, also referred to as a "Short squeeze". Nasdaq reports that as of September 15th, 2015, that 62,676,807 were out on loan to short sellers.

When a large percentage of shares are borrowed, it can create situations where betting against the short sellers can be very lucrative, as well as rapid. That's because during a squeeze, the short sellers have no ability to stop their losses until they get their shares returned to the original owner, or paid for. This is known as short covering, and it ultimately turns short sellers into buyers.

Overall analyst consensus gives Mattel a price target of $25/share over the next 12 months. The company reports earnings at market close on Thursday, 10/15/2015.