- The most shorted stocks in the market are staging strong moves higher as groups of investors on the popular Reddit forum WallStreetBets pile in.
- Names like GameStop, BlackBerry, and AMC have soared with little fundamental news behind the moves.
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A handful of stocks that have high short-interest are staging epic raillies that are in-part being fueled by groups of investors on the popular Reddit forum WallStreetBets piling into the names.
Names like GameStop, BlackBerry, and AMC Entertainment have soared hundreds of percentage points in recent weeks with little fundamental news behind the moves.
The rallies were likely sparked a short squeeze event in the shares, which further fueled the sky-high surges. A short squeeze is when short-sellers are forced to buyback the stock to close out their losing positions, boosting demand for the stock in question.
GameStop seems to have become the main target of Reddit users in recent weeks, sparked by the prospects of activist investor Ryan Cohen’s campaign to turn the company into a specialized e-commerce platform that sells gaming products. Shares of GameStop soared as much as 145% in Monday trades on no apparent news.
The moves in GameStop helped it become a battle ground stock, with Citron’s Andrew Left outlining why he felt the stock should fall about 50% to $20 when it was trading near $40 last week. Shares of GameStop hit an all-time high of $159.18 in Monday trades.
Citron ultimately ended commentary on GameStop after being on the receiving end of harassing actions from investors, Left said in a letter last week.
Shares of BlackBerry, AMC Entertainment, and Bed Bath & Beyond also staged monster year-to-date rallies with little news to back up the moves.
BlackBerry is up as much as 214% year-to-date at Monday's intra-day high, with a mid January spike sparked by a patent settlement with Facebook on its messaging technology. Shares are up more than 100% over the past week.
AMC Entertainment is up as much as 130% year-to-date at Monday's intra-day high. The stock surged as much as 39% on Monday after the movie theater chain said it raised nearly $1 billion over the past month, which will help it avoid bankruptcy and extend its cash runway well into 2021.
Bed Bath & Beyond is another heavily shorted stock that jumped as much as 58% on Monday on no apparent news besides a price target increase from Loop Capital. The home furnishing retailer has jumped as much as 169% year-to-date at Monday's intra-day high.
Besides being stocks with high short interest and uncertain fundamentals, all have been mentioned on the WallStreetBets forums by users who were buying shares in recent weeks.