![]() Who Is Squeezing Wall Street?In speaking with traders on r/WallStreetBets, it’s evident that these traders are not wolves of Wall Street, but hobbyists who trade on the side and have either a clear-eyed or irreverent view of the stock market. Short sellers rushing to buy while minimizing losses created a rush to buy GameStop stock, which in turn drove up prices. Redditors on r/WallStreetBets saw the short early and moved in to buy GameStop stock early and cheap, creating a short squeeze. But instead of going down, prices are going up, and this is bad for short sellers who have to buy back the stock they borrowed. If that happens, they can buy back the stock for even cheaper and keep the difference as a profit. Some Wall Street investors bet that GameStop would continue to struggle and began short-selling the company, a strategy where an investor borrows stock of that particular company - in this case, GameStop - and sells it in the hopes that prices for the stock will continue to drop. On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. But anyone concerned with actual value investing and building a growth portfolio should still stay away. Investors can expect to hear Redbox discussed frequently as contrarian investors continue their quests to push their favorite stocks higher. And if that type of catalyst can’t boost shares, it’s hard to be optimistic about a company’s growth potential. Even being acquired by a prominent media producer hasn’t helped Redbox achieve the type of sustainable growth investors want to see. High short interest can make them tempting plays, but that doesn’t mean the companies have any actual utility. Redbox’s recent rise and fall should remind investors of how volatile meme stocks are. It remains the most discussed stock on the r/Shortsqueeze forum, but mentions have fallen 19% since yesterday. While both “short” and “squeeze” are popular keywords, both overall mentions and mentions on the meme stock forum have been decreasing steadily. In 24 hours, RDBX stock has gone from ranking sixth on r/WallStreetBets’ most-discussed stocks to 21st. As InvestorPlace contributor David Moadel recently reminded investors, though, “The company is going through major changes now, so RDBX stock is only appropriate for traders who can handle the risks involved.”Įven so, it is clear the momentum that pushed Redbox up yesterday has subsided. Additionally, Apollo Management, Standard General and Vanguard Group all maintain large positions in RDBX. Chicken Soup for the Soul Entertainment (NASDAQ: CSSE) recently announced plans to acquire it for $375 million. Redbox has been in the news for positive reasons lately. On May 31, Redbox topped short research platform Fintel’s list of stocks that presented the best short-squeeze opportunities. Second, short interest in RDBX stock had reached 37.58%. First, comments on Reddit’s r/WallStreetBets surged 400% in the past 24 hours and that by the end of May. ![]() High trading from retail investors pushes them up with no warning, but short interest is never far away.Ī recent analysis from Seeking Alpha reveals two things. Redbox’s recent activity is completely in keeping with that of previous meme stocks such as Gamestop (NYSE: GME) and AMC Entertainment (NYSE: AMC). ![]() While it has rallied slightly, it remains in the red by more than 35% as of this writing. RDBX stock has been falling since markets opened today. And that is exactly what we are seeing from Redbox. But as InvestorPlace writer William White noted, when a company joins the ranks of the meme stocks, it is subject to extreme volatility. Shares spiked more than 30% as high short interest collided with the heavy trading volume generated by retail investor activity. Yesterday, as bearish energy engulfed Wall Street, RDBX stock rose steadily through the chaos.
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