For your weekend, I submit below the other side of the great Wall Street Story of the Week -- the debacle with Reddit, GameStop, and the hedge funds, as presented by yesterday's edition of U.S. News Invested. I suspect that the SEC will ultimately determine that this group of so-called retail investors are not democratizing the market at all but engaging in market manipulation.
Personally, I cannot conceive how deliberately organizing to make massive purchases of stock in what are widely regarded as losing companies in order to force the stock price up so as to make a fortune in the options market can be legal. It's odd this is one issue that even AOC and Ted Cruz agree on, both championing the cause as democracy. I suspect AOC simply does not understand the market and Cruz is laughing all the way to the bank. But perhaps I'm wrong. Perhaps they do understand. Perhaps it is legal. Perhaps it really is democracy in action. Let the chips fall where they may. Enjoy the weekend.
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Invested
Advice, rankings and stock market news for investors.
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TODAY'S FEATURED STOCK
STORY
8
Top Reddit Stocks Gaining Buzz
The members of the
WallStreetBets community on Reddit – which reportedly has grown by more
than 2 million this week to upward of 4.5 million members – have brought
Wall Street to its knees.
WallStreetBets describes itself as "like 4chan found a Bloomberg
terminal illness," and it represents total Wall Street
counterculture.
The community has successfully targeted stocks with extremely high short
interest and leveraged the power of the options market to trigger
inordinate short squeezes – known as gamma squeezes – in many of their
targets, forcing market makers to buy shares of stock by purchasing
out-of-the-money call options.
The strategy has worked like a charm so far, and buying volume has been
so heavy that brokers have even been forced to temporarily restrict
buying in certain stocks. Here are eight stocks the WallStreetBets
community loves:
1. GameStop (ticker: GME). Brick-and-mortar
video game retailer GameStop has been the poster child of the
WallStreetBets buying frenzy. GameStop is the most shorted stock in the
market relative to its float, according to S3 Partners.
2. BlackBerry (BB). A
turnaround effort has BlackBerry's revenue once again trending in the
right direction, up 15% in 2020. However, the company still reported a
net loss of $152 million last year as its struggles continue. Thanks to
WallStreetBets, BB stock is up about 120% in the past month.
Click here to continue.
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Reddit, set, go with
these eight buzzworthy stocks:
- GameStop
Corp. (GME)
- BlackBerry
(BB)
- Bed
Bath & Beyond (BBBY)
- AMC
Entertainment Holdings (AMC)
- Nokia
Corp. (NOK)
- Palantir
Technologies (PLTR)
- Express
(EXPR)
- Plug
Power (PLUG)
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