Support.com shares soar another 50% as meme traders pile into the heavily shorted software company
The Reddit logo can be seen in this image dated January 28, 2021 on a smartphone in front of a Wall Street Bets logo displayed.
Given Ruvic | Reuters
Support.com stocks are poised to extend their massive GameStop-style rally as Reddit-obsessed retail investors turn to the heavily truncated software name.
The tech support provider’s stock was up 50% on Monday, making it the eighth straight day of gains. Shares soared 223% during the seven-day winning streak as Reddit traders poured into the little-known small-cap stocks.
Nearly 60% of Support.com’s floating stocks are currently being sold short, according to S3 Partners. This is extremely high short interest since the average US stock typically has about 5% stocks short.
The meteoric surge is reminiscent of the epic GameStop short squeeze in January, when coordinated trading on the WallStreetBets social media platform sparked monstrous movements in the stock and inflicted huge losses on short sellers.
When a stock bounces up sharply, it forces short sellers to buy back stocks to limit their losses. Short coverage tends to fuel the stock’s rally.
According to alternative research provider Quiver Quantitative, SPRT ticker mentions on Reddit’s WallStreetBets are up 66% over the past week.
In March, Support.com announced that it had entered into a merger agreement with Greenidge Generation Holdings. The company announced earlier this month that it has scheduled a special meeting of its shareholders on September 10 to approve the proposed merger.
Vinco Ventures is another popular chat room target with the ticker BBIG, Quiver Quantitative Data said. The stock was up about 50% on Monday after rising 120% last week.
Drastic moves in meme stocks tend to occur when overall trading on Wall Street is subdued. Investors mostly wait for a major job report on the Friday before Labor Day weekend in a week, which is likely to be below average in volume.
Did you like this article?
For exclusive stock selection, investment ideas and global CNBC livestream
Sign up for CNBC Pro
Start your free trial now