One of the major investment themes of 2021 has been so-called “meme stocks.” Traditionally, stocks rise or fall in reaction to earnings or major company announcements. Meme stocks, on the other hand, don’t trade on their fundamentals. Rather, online message board participants target certain names with large short positions in an effort to trigger huge price movements.
Names like GameStop and AMC Entertainment have made headlines for months but to some degree are already “yesterday’s news” in the meme-stock game. While no one can predict which stock will be the next meme-stock sensation -- or debacle -- some names have been getting hyped lately on Reddit and other message boards. Bear in mind that most meme stocks carry a relatively high degree of risk, so you should consult with your financial advisor before buying any.
Last updated: July 20, 2021
PubMatic, Inc. (PUBM)
Stock price as of July 16: $31.70
PubMatic is a heavily shorted meme stock that many analysts on Wall Street are actually behind. With a 52-week range of $22.42-$76.96, PUBM sits about 59% down from its recent high. Analysts have a consensus strong buy on the stock, with a whopping $52.40 average price target, about 65% above current levels. About 38% of the company's float is currently sold short, making it susceptible to a short squeeze at some point.
Clover Health Investments, Corp. (CLOV)
Stock price as of July 16: $8.20
Clover Health has all of the characteristics of a meme stock: a huge price spike on June 8 followed by a massive sell-off, along with a whopping short position of 32% of the outstanding float. The company is also widely discussed on the Reddit forum WallStreetBets. The stock peaked at $28.85 but rapidly fell over 70% to current levels. The average analyst price target is just $9.50, so the stock is likely to trade more on message board activity and a potential short squeeze than any major fundamental drivers.
Stock price as of July 16: $42.80
Only about 5% of electric vehicle maker Nio's shares are sold short, but the name has been getting increased attention on WallStreetBets as of late. Message board enthusiasts see the shares hitting $60, up about 40% from current levels. Stock analysts are even more bullish, with an average 12-month price target of $64.22 and a consensus strong buy rating. With both Wall Street and Main Street throwing their support behind the stock and the shares down over 11% year-to-date, future gains could be in the cards for Nio.
Stock price as of July 16: $40.29
ViacomCBS already had a "meme run" in March 2021, when the shares peaked at $101.97. Yet, the stock has picked up increased attention on Reddit over the past few weeks, after trading mostly flat for the past few months. Analysts see decent gains in the stock over the next 12 months, with an average $49.18 price target, but Redditors may be hoping for something more.
Clean Energy Fuels (CLNE)
Stock price as of July 16: $7.56
Clean Energy Fuels joined the ranks of the meme-stock universe on June 8, when the stock soared 30% before promptly falling 15% the following day. The stock has had a 52-week range of $2.34-$19.79 and, currently, 10.48% of the firm's shares are sold short. Only a few analysts follow the stock, with a consensus hold rating and an average price target of $10.50.
Stock price as of July 16: $18.16
Koss hasn't received the same type of media coverage as names like GameStop and AMC Entertainment, but its stock price performance in 2021 has been nothing short of dizzying. After skyrocketing an astonishing 480% on Jan. 27 alone, the stock price came back to Earth before popping nearly 70% on June 2. Year-to-date, shares of Koss remain up over 450%, yet it's still down 85% from its 52-week high of $127.45. Needless to say, investors should approach this stock with extreme caution.
Rocket Companies (RKT)
Stock price as of July 16: $17.35
Reddit traders pushed up shares of Rocket Companies to a 52-week high of $43 in early March 2021, before the stock promptly reversed course and fell back down. The parent company of Rocket Loans, formerly known as Quicken Loans, has been trying to value itself as a technology platform rather than a financial services company, so wild swings could still lie in the stock's future. About 10.67% of the company's outstanding float is currently sold short.
SoFi Technologies, Inc. (SOFI)
Stock price as of July 16: $15.30
SoFi only began trading publicly on June 1, but it's already drawn the attention of short-sellers -- and Reddit message board enthusiasts. The short position in SoFi is quite sizable, amounting to about 31.5% of outstanding shares. The stock is off about 50% from its recent highs, but it's still up over 23% year-to-date. If the message board crowd gangs up on the stock and triggers a short squeeze, shares of SoFi could see a sharp move.
Virgin Galactic (SPCE)
Stock price as of July 16: $30.20
Virgin Galactic has been in the news quite a bit lately as founder Richard Branson took his first spaceflight aboard the VSS Unity on July 11, ushering in the age of commercial space flight. As a company full of promise but short on earnings or revenue, Virgin Galactic is by nature a volatile stock. Add in the 17.41% short position and its popularity on Reddit and SPCE could either go ballistic or crater at any time.
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Stock price as of July 16: $19.93
Cleveland-Cliffs has been picking up mentions on Reddit's WallStreetBets forum as of late. The steel and iron-ore mining company has about 10% of its outstanding float sold short. Thus far, the stock has not traded like a meme stock but has rather been in a steady uptrend. Analysts are getting behind the stock, with a consensus strong buy rating and an average 12-month price target of $29.62.
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