The Reddit logo appears on a smartphone in front of the Wall Street Bets logo shown in this illustration taken on January 28, 2021.
dado ruvik | Reuters
Support.com shares extended their massive GameStop-style rally as Reddit-obsessed retail investors focused heavily on the name of the smaller software.
The tech support provider’s stock rose 50% on Monday, its eighth consecutive day of gains. Shares are up 223% in a seven-day winning streak as traders on Reddit flock to little-known small-cap stocks.
According to S3 Partners, around 60% of Support.com’s free float shares are currently selling short. This is a high degree of low interest, as the average US stock typically has about 5% of its stocks sold short.
The meteoric rise is reminiscent of GameStop’s epic short squeeze in January, when coordinated trading on the WallStreetBets social media platform resulted in monstrous movements in the stock and huge losses for short sellers.
When a stock bounces sharply, it forces short sellers to buy back the stock to limit their losses. The short coverage further fuels the title rally.
According to alternative research provider Quiver Quantitative, mentions of ticker SPRT on Reddit’s Wallstreetbets have increased 66% over the past week.
In March, Support.com announced that it had agreed to merge with Greenidge Generation Holdings. The company said earlier this month that it had scheduled a special meeting of shareholders on September 10 to approve the proposed merger.
Vinco Ventures – which trades under the symbol BBIG – is another popular target in chat rooms, quantitative data from Quiver showed. The stock rose nearly 44% on Monday after jumping 120% last week.
Huge moves in mem stocks occur when global trading on Wall Street is muted. Investors are mostly looking forward to a major jobs report on the Friday leading up to Labor Day weekend in a week that will see below-average volumes.
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