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Retail traders have been flocking to a horde of new meme stocks this week — from a mining company to a fast-food chain and a car retailer. 

The stocks, from a wide variety of sectors, don’t have much in common, except that they’re seeing increased social media hype and price volatility. Even their short-interest rates — a coveted metric that Reddit traders use to determine if a stock is primed for a short squeeze — vary considerably. 

Restoration Hardware was among the new names. The home-furnishings retailer soared as much as 15% Thursday amid a jump in positive Reddit chatter. 

Another new meme stock is Clean Energy Fuels. The Newport Beach, California-based natural gas provider has become so popular this week that it took over as the most-hyped company among retail traders on Reddit investing threads, HypeEquity data showed. Reddit listed the company on its “daily popular tickers thread” alongside Clover Health and BlackBerry.

Even so, the company has had a volatile 24 hours. It closed Wednesday 31.5% higher only to fall in Thursday trading.

It isn’t the only new meme stock this week to whipsaw from big gains to losses. 

ContextLogic, a mobile e-commerce company, surged Tuesday, erased some gains Wednesday and turned back upward Thursday. Quiver Quantitative listed the company as the most-discussed ticker on June 9 on Reddit with nearly 4,000 mentions. By comparison, meme-stock classic AMC Entertainment had just 1,400 mentions. 

The second-most mentioned stock according to the data was Cleveland-Cliffs, an Ohio-based iron-ore mining company.

The stock, listed under the ticker CLF, jumped 14.6% in Wednesday trading to its highest since 2014, briefly continuing the rally Thursday before turning lower. Bullish posts from Redditors put the stock at a “strong buy,” according to HypeEquity data, as it had three times the number of buy to sell mentions.

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Wendy’s is another new name. The fast-food restaurant surged 26% Tuesday, thanks to social media hype from retail traders, and then it erased half its gains from the day prior on Wednesday and continued to fall Thursday.

One Redditor with a long comment history advised others, “Cut your losses and get out.”

Positive social volume about Invesco Mortgage, a Nebraska-based real estate investment trust, took off on Reddit this week, too, as the stock rallied 17.8% Wednesday and continued to build on its gains Thursday.

Little-known UWM Holdings, the Pontiac, Michigan-based mortgage lender, saw about 1,000 mentions on Reddit, Quiver Quantitative data showed. Redditors have pointed out the opportunity for a short-squeeze in the stock in the past, as it has a 21% short interest rate, according to MarketBeat.

Though causing big losses for short sellers has been a stated goal for traders on Wall Street Bets since the GameStop saga earlier this year, the newer meme stocks do not have as high of a short interest that set the stage for other short squeezes.

Compared to meme-stock classics, AMC and GameStop, which have a 21% short interest rate, the new stocks don’t have as much, as retail traders have actually scared off some …read more

Source:: Business Insider

      

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