After falling earlier this year, a plethora of so-called memes rose sharply again on Wednesday as individual investors again sought to raise the prices of the shortest companies on Wall Street – prompting experts to warn that the saga of institutional investors against Reddit traders could go bad. to complete.
Along with the recent revival of so-called mem stocks, AMC shares rose as much as 40% on Wednesday and rose a staggering 314% over the past month, as increased option activity and growing short interest in stocks assistance to retailers squeeze out institutional investors who are betting on falling from their risk bets.
Meanwhile, troubled retailer Bed Bath & Beyond rose nearly 51% on Wednesday as traders on Reddit’s r / WallStreetBets discussion board say short stock interest has climbed to almost double the level of other GameStop meme stocks, up about 3% in Wednesday and 60% in the last month.
Similarly, shares of the former BlackBerry phone maker rose as much as 15% on Wednesday and rose nearly 55% in the past month, as retail hype has risen now that short interest rates have reached a four-year high.
Other revitalizing memes involved in the latest craze include Beyond Meat and Koss Corporation, which have jumped nearly 40% per piece in recent weeks.
“Currently, most of Wall Street is on standby for a job report as of Friday, so stock mania and cryptocurrency trading may have little resistance,” Edward Moya, a senior market analyst at Oanda, wrote in an email Wednesday, pointing to a “joke.” as a sign of the meteoric rise of dogecoin on the same day as a sign of further undiminished market turmoil. “The retail power behind this movement is still strong, so everyone is guessing how much this bubble can grow.”
“Although we had some exit during the year, most retailers were happy to sit on significant paper losses in the short term in the hope that small investors would blink first and losses would not materialize,” Ortex analysts said. wrote in a note from Wednesday. “This now looks like the wrong strategy.”
The recent increase in the number of memes follows similar an increase in January, when activist investors settled on Reddit’s r / WallStreetBets board, pumping combat companies like GameStop and BlackBerry in an attempt to harm vendors briefly. “There is some vigilance among those traders who are drawn into this social media madhouse to pump certain stocks,” said Nigel Green, chief executive of Devere Group’s $ 12 billion advisory firm, adding that “before that, caution should be exercised by joining meme stocks of that nature. ”Meme stocks have been incredibly volatile this year, with most collapsing in late January when institutional investors accumulated from their short bets after a few weeks of meteors. So far, only AMC, which has also benefited from the reopening of the company, has made up for those losses.
What to look out for
It is unclear how long it will take before the short interest rate falls again, but some analysts say the market could get wet again when the Federal Reserve says it will ease its adjustment policy, which has effectively eased high asset valuations by injecting unprecedented amounts of cash into the economy. That could happen as soon as June, when Fed officials meet again to discuss policy changes.
As another sign of a frantic investment, shares of Mudrick Capital Acquisition Corporation II fell 15% on Tuesday after a crowd of Reddit traders began placing bearish short bets on shares after Bloomberg report his namesake sponsor paid off his stake in AMC because the shares were “overvalued”.