The trade in so-called meme values began this week, with talks on the possibility of short expressions.
Another batch of names has been added to the meme frenzy, while retailers joined their latest favorites on Wednesday.
Prison operator GEO Group Inc. shot up 60% and Clean Energy Fuels Corp. jumped 24% starting at 2:32 p.m. in New York, supplanting names like ContextLogic Inc. and Clover Health Investments Corp. who had led the charge this Tuesday. In Europe, Air Berlin jumped 138% after growing 54% the day before. Meanwhile, shares of the fast food restaurant chain Wendy’s Inc. they reversed gains as of Tuesday after Northcoast and Stifel lowered shares to maintain equivalent buying recommendations.
Trading in so-called meme stocks began this week, with the creation of talks on WallStreetBets and other social media platforms about the potential of short expressions as investors in forums that met against short sellers.
The speculative frenzy among Reddit’s favorite names has manifested itself especially as most of the stock market has gone nowhere. Although the shares of AMC Entertainment Holdings Inc. and Clover Health have jumped at least 85% in June, the Russell 3000 index is up just 1%.
“The fashion for meme stocks is a liquidity phenomenon,” said Matt Maley, chief market strategist at Miller Tabak + Co. “This is far from something that Reddit marketers play. There are a lot of impulse-based hedge funds (with algae) that have a lot of money driving these things.”
The volume of options has increased amid the recent exuberance of some memes. The volume of daily individual stock options rose to $ 383 billion last week, Barclays analyst Maneesh Deshpande said in a note.
“One of the surprising dynamics of last week has been the increase in the inclinations of a single stock (in the rest of the universe) as the activity of retail options increased and increased the demand calls up on meme stocks, ”Deshpande said in the report.
On Wednesday, the chairman of the U.S. Securities and Exchange Commission, Gary Gensler, called on the agency to conduct a review of the structure of the stock market, including so-called best execution requirements. This comes after the SEC said earlier this week that it is studying markets to detect signs of manipulation as meme stocks continue to rise.
GameStop Corp., which kicked off meme fashion in January, reports first-quarter results after the close of trading today. At this morning’s annual video game retailer meeting, newly elected President Ryan Cohen appealed to retailers who have been fueling the concentration of stocks. “We are fortunate to have such a special group of investors who own the company’s shares,” he said.
Wendy’s was downgraded to keep the purchase from Stifel, who said the stock’s valuation fully reflects the growth it had been assuming to reach its $ 25 target price. Analyst Chris O’Cull said in a note that it is still “constructive towards the company’s fundamental prospects.”
Other stocks that move today and have a high short interest rate as a floating rate, according to data from IHS Markit Ltd. at 2:32 pm in New York:
- Atomera Inc., with 12% short interest, gained 22% on Wednesday
- Clovis Oncology Inc. has a short interest rate of 34% and has risen 14% today
- Genius Brands International Inc. has increased 13% and has a short interest rate of 13%
- Inovio Pharmaceuticals Inc. jumped 16% on Wednesday and has a short interest rate of 26%
- Invesco Mortgage Capital Inc. rose 19% on Wednesday and has a short interest rate of 12%
- PubMatic Inc. has a short interest rate of 47% and has risen 10% today
- Root Inc., with 14% short interest, gained 23% on Wednesday
- SmileDirectClub Inc. met 10% and has a short interest of 18%
- World Wrestling Entertainment Inc. added 11% and has a short interest rate of 23%
- Ziopharm Oncology Inc. has a short interest rate of 14% and rose 13%