The Reddit logo appears on a smartphone in front of the Wall Street Bets logo displayed in this illustration taken on January 28, 2021.
Looking at Ruvik | Reuters
Support.com shares extended their massive GameStop-style rally as Reddit-obsessed retail investors heavily zoned in on the small software name.
The tech support provider’s stock rose 38.2% to $36.39 per share on Monday, marking an eighth day in a row. Shares are up 347% during an eight-day winning streak as Reddit traders flock to small-cap stocks.
According to S3 Partners, about 60% of Support.com’s float shares are currently selling short. This is a high degree of low interest, as the average American stock typically has about 5% of its shares sold short.
The meteoric rise is reminiscent of the epic GameStop short squeeze in January, when coordinated trading on social media platform WallStreetBets resulted in monstrous moves in the stock and huge losses for short sellers.
When a stock jumps sharply, it forces short sellers to buy back the stock to limit their losses. Short covering further fuels the stock’s rally.
According to alternative research provider Quiver Quantitative, mentions of the SPRT ticker on Reddit’s Wallstreetbets have risen 66% over the past week.
In March, Support.com said it had agreed to merge with Greenidge Generation Holdings. The company said earlier this month that it has scheduled a special stockholder meeting for September 10 to approve the proposed merger.
Vinco Ventures — which trades under the ticker BBIG — is another popular target in chat rooms, Quiver quantitative data showed. The stock jumped nearly 33% on Monday after jumping 120% last week.
Massive moves in mem stocks happen when overall trading on Wall Street is muted. Investors are mostly looking forward to a major jobs report on the Friday before Labor Day weekend in a week that will see below-average volumes.
Enjoyed this article?
For exclusive stock picks, investment ideas and CNBC global livestreams
sign up for CNBC Pro
Start Your Free Trial Now