Reddit did it again.
You can’t be blamed for thinking that the short squeezes in January 2021 were a complete anomaly, not to be repeated.
Market pundits have plenty of explanations for why, but it happened again. Last time, the main event was GameStop (GME), and this time it was (is?) AMC Entertainment (AMC).
Let’s take a brief look at some of the biggest moves in this “Reddit group.”:
- AMC Entertainment (AMC)
- GameStop (GME)
- Clover Health (CLOV)
- Wendy’s (WEN)
- World Wrestling Entertainment (WWE)
- Workhorse Group (WKHS)
- Virgin Galactic (SPCE)
- Bed Bath and Beyond (BBBY)
In short, the high short interest names like GameStop (GME), AMC Entertainment (AMC), and Bed Bath and Beyond (BBBY) went parabolic again, as they did in January 2021, with some newcomers this time around.
It’s not certain that these are full-on short squeezes, because a large portion of the short interest in these stocks have shored up since January, and many of the companies have issued more shares, loosening up the float.
Instead, it seems that the power of Reddit and social media-driven rallies has increased, as they even set their aims on more difficult targets like World Wrestling Entertainment (WWE) and Wendy’s (WEN), neither of which are typically thought of as “fast money” stocks.
Many refer to the stock market in metaphysical terms now.
You’ll hear phrases like “whatever the market should do, it’s doing the opposite.” Options trader Cem Karsan says summer 2021 will be the “Summer of George,” a reference to the episode of Seinfeld when George Costanza does everything wrong and somehow it all works out.