Why GameStop, Naked Brand, Rocket Companies, and Other Reddit Stocks Soared Today
Joe Tenebruso, 02 June 2021
What happened
Reddit’s army of individual investors appears to be growing ever more powerful. After taking some time to regroup and emboldened by their recent success with AMC Entertainment (NYSE:AMC), these traders launched a major counteroffensive on Wednesday — one that helped to drive the prices of multiple stocks sharply higher.
Here’s how some of the most popular stocks on Reddit fared today:
Koss (NASDAQ:KOSS), up 69%
Naked Brand Group (NASDAQ:NAKD), up 29%
GameStop (NYSE:GME), up 13%
Rocket Companies (NYSE:RKT), up 13%
Ashford Hospitality Trust (NYSE:AHT), up 15%
So what
AMC Entertainment rocketed 95% as people ramped up their promotion of the stock on Reddit, Twitter, and other social media sites. By coordinating their purchases, these investors hope to fuel a steep rally in AMC’s stock price and ignite a massive short squeeze.
Forcing short-sellers to vacate their positions by buying back the shares they shorted can accelerate a stock’s price gains. And this short-squeeze cycle can perpetuate until many short-sellers capitulate.
