Why Sundial, AMC, Blackberry, and Other Reddit Stocks Soared

Motley Fool 2021-02-25

Get ready for round two of the battle between the bulls and bears.

What happened

Reddit traders are back. After licking their wounds following GameStop's brutal decline from its highs, the Wallstreetbets-led army of individual investors appears to be trying to ignite a new round ofshort squeezes.

Here's how some of the most popular Reddit stocks fared on Wednesday:

  • Express(NYSE:EXPR), up 41%
  • Naked Brand Group(NASDAQ:NAKD), up 31%
  • AMC Entertainment(NYSE:AMC), up 18%
  • Sundial Growers(NASDAQ:SNDL), up 15%
  • BlackBerry(NYSE:BB), up 9%

So what

Many investors were infuriated when Robinhood and other brokerages placed restrictions on their customers' ability to buy shares of GameStop and other heavily shorted stocks back in January. Those moves helped end the trading frenzy in GameStop and other popular Reddit stocks, leading to a sharp decline in their prices.

Following heavy criticism from investors and regulators, Robinhood eventually moved to allow uninterrupted trading in GameStop and the other stocks for which it had limited purchases. The popular trading platform said the restrictions were temporarily necessary due to soaring capital requirements imposed by clearinghouses during the trading frenzy. Robinhood subsequently raised several billion dollars from investors to better comply with those requirements should trading volumes increase once again.

Now what

Well, Reddit traders appear to be gearing up to test Robinhood's newly strengthened capital reserves. With the trading platform likely to be reluctant to impose new buying restrictions due to the backlash it faced last time around, it will be interesting to see how any potential short squeezes will play out with no interference from Robinhood.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • Terry1989
    2021-02-28
    Terry1989
    Love this stock
  • LateWizard
    2021-02-26
    LateWizard
    I just like the stock ?
  • StormsRiders
    2021-02-26
    StormsRiders
    "it will be interesting to see how any potential short squeezes will play out with no interference from Robinhood."What's interesting? Full of BS. RH already bleed them dry, they no capital how to play? Horse Back Cannon.
  • Jinkachu
    2021-02-26
    Jinkachu
    Wow
  • pinkishmin
    2021-02-26
    pinkishmin
    Great
  • pinkishmin
    2021-02-26
    pinkishmin
    Lets go
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