Koss: Don't Buy The Hype On This Highly Shorted Meme Stock

seekingalpha2021-03-15

Summary Koss is a small electronics company that got caught up in the meme stock runup, but has little hope for massive growth in the future. Meme stocks trade on hype instead of fundamentals, so be ...

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Gfree
2021-03-15
Gfree
Help like and comment thanks!
xoxoll
2021-03-15
xoxoll
Help me to comment and like
f123bb0
2021-03-15
f123bb0
[微笑]
- f123bb0:
  ok
- xoxoll:
  Help me to comment and like
briannto
2021-03-15
briannto
Ok
ProsperTTM
2021-03-15
ProsperTTM
Comment pls thx
AL30
2021-03-15
AL30
Pls like and comment! Thank you
- 真的钻石手:
  Awesome bro!

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Stocks like Koss are great swing trading plays, but make for terrible long-term investments. If you're looking for an upside with high risk, then turn your attention to the smallest meme stock based on market cap.\nKoss's Business Model\nKoss makes headphones and I remember owning a cheap pair of Koss stereo headphones back when I was a kid growing up in Washington DC.\nSource: Koss.com\nSince then, big tech companies like Apple (AAPL) entered the headphone market and stole market share from longstanding headphone makers.\nKoss reported just under $5 million in total revenue for the quarter ending December 31, 2020. Net income per share equaled 7 cents (up from 3 cents during the same period in 2019). Many Americans were forced to work from home during the global pandemic, which helped lift electronic accessory sales nationwide. TTM sales are around $18 million, and the company has a cash position of $4.39 million. With a market cap of around $192 million, Koss stock trades at a reasonable P/S ratio but lacks significant revenue growth in the future.\nKoss is a small, yet profitable company but doesn't possess big upside like other big tech companies. However, that didn't stop retail traders from targeting the 63-year-old company as a prime target for an epic short squeeze.\nThe Koss Short Squeeze Explained\nIn late January, Reddit users of the subreddit \"WallStreetBets\" decided to team up and earn billions of dollars in profits by targeting low float stocks with high short positions. The goal was to force hedge funds with short positions to buy back the stock at a higher price to create a short squeeze. Short sellers borrow shares of a stock, then sell them off with hopes of buying back the stock at a cheaper price to earn a profit.\nHowever, WallStreetBets realized that Wall Street short sellers made a critical error. Koss had a high short interest of over 38% percent with a low float. With only a float of 3 million, any massive increase in buying power would send the stock soaring and force shorts to cover their losing positions.\nKoss stock did just that.\nKOSS jumped from $3.34 to $10 between January 22nd and 26th, then skyrocketed to an all-time high of $127.Robinhood famously stepped in and deleted the buy button to put an end to the epic short squeeze.\nData by YCharts\nNow that the dust has settled, Koss has a much lower short interest of 14% and the WSB crowd has shifted its sights on other short squeeze targets.\nHow to Profit from Koss During the Next Short Squeeze\nI cannot recommend Koss as a good, long-term investment because I mainly write about hyper growth stocks that can return at least 30% to 40% annually. Koss is an old dinosaur of a company with little hope for future growth.\nBut there is a way to profit from the next Koss short squeeze if it happens.\nThe best way to play Koss stock is to monitor theRSI(relative strength index) and volume. RSI is my favorite technical analysis indicator to determine whether a stock is overbought or oversold. We want to monitor KOSS stock when it gets \"boring\" and the RSI dips to around 50 or below.\nData by YCharts\nUnfortunately, novice traders make the classic mistake of buying what's popular and exposing themselves to the potential for massive losses. People who bought KOSS at $100 or more believed the stock could go to $200, but in reality, they lost a ton of money and probably stopped trading stocks altogether.\nKoss had an RSI of 90 at its peak, signaling it was time to sell and get out of the stock. Monitor the RSI will help you avoid \"buying at the top\" and reduce your exposure to massive trading losses.\nVolume is another key indicator that will give us information on when to enter the trade. Wait for volume spikes before buying the stock because you don't want to hold KOSS shares in anticipation of a bullish move. Set up an alert to notify you when Koss stock volume is up or just monitor Yahoo! Finance Trending Tickers to find a good entry point.\nMy strategy is to buy Koss stock when the RSI is near or below 50, then sell it once it reaches 65 or more. It's a sound strategy that will protect you from losses because you must limit downside risk.\nRisk Factors: Inflated Stock Prices Due to Massive Hype\nAs I mentioned above, too many novice traders \"buy the hype\" and expose themselves to huge losses.\nMeme stocks trade on hype instead of fundamentals. If you really think that Koss stock will keep soaring when the underlying business earns $18 million annually, then you will lose your shirt. Never buy the hype or chase a bullish runup. Wait for a good entry position at a much cheaper price when the next bullish run happens.\nThere are literally thousands of stocks to choose from every day. No reason to chase gains or FOMO.\nConclusion\nKoss is a small electronics company that hasn't shown signs of hypergrowth potential. The best strategy for Koss shares is to buy low during higher volume, then dump the stock once the RSI gets too high.\nI don't recommend Koss as a long-term investment and prefer Apple stock over the long term. If you must chase massive gains trading meme stocks like Koss, then protect yourself at all costs and don't buy the hype.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":322159508,"gmtCreate":1615785958404,"gmtModify":1704786463334,"author":{"id":"3576156004857448","authorId":"3576156004857448","name":"Gfree","avatar":"https://static.tigerbbs.com/2bad494c1eb68de3655386130ab22aae","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3576156004857448","authorIdStr":"3576156004857448"},"htmlText":"Help like and comment thanks!","listText":"Help like and comment thanks!","text":"Help like and comment 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like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/322150165","repostId":1108838813,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":322122427,"gmtCreate":1615785348769,"gmtModify":1704786456198,"author":{"id":"3575498845973925","authorId":"3575498845973925","name":"f123bb0","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3575498845973925","authorIdStr":"3575498845973925"},"htmlText":"[微笑]&nbsp;","listText":"[微笑]&nbsp;","text":"[微笑]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/322122427","repostId":1108838813,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3800430,"gmtCreate":1615818310857,"gmtModify":1680780458013,"authorId":3575498845973925,"author":{"id":3575498845973925,"idStr":"3575498845973925","authorId":3575498845973925,"name":"f123bb0","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322122427,"type":1,"supId":3796391,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"},{"id":3796391,"gmtCreate":1615785770665,"gmtModify":1680780397644,"authorId":3572249185724220,"author":{"id":3572249185724220,"idStr":"3572249185724220","authorId":3572249185724220,"name":"xoxoll","avatar":"https://static.tigerbbs.com/8ed65c2962af2a6fbd414f4d6fe9e378","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":322122427,"type":1,"supId":0,"prevId":0,"content":"Help 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