Meme stocks rally at a halt as Redditors focus on biotech stocks
Small-time stock traders turned their attention to the biotech and healthcare sectors on Monday, lifting shares of some by as much as 10%, while the rally in stocks that were favored in recent weeks appeared to fade.
Of the top 10 stocks trending on trading-focused social media site Stocktwits, vaccine developers Novavax Inc and Vaxart Inc were in the third and fourth spots, respectively, with message volume on Vaxart up 9.7% and nearly 97% of them reflecting a positive sentiment.
Shares of Novavax jumped 10.3% in premarket trading as the company also reported late-stage data from a U.S.-based clinical trial showing its vaccine was more than 90% effective against COVID-19 across a variety of variants of the virus.
Individual traders on forums such Reddit’s WallStreetBets have acted in concert this year to bid up shares of heavily shorted stocks, triggering a phenomenon known as a “short squeeze”, which pushes up stock prices even more.
Video game retailer GameStop Corp and cinema operator AMC Entertainment, which were at the center of the so-called “meme stock” rally this year, have seen their share price soar more than 1,100% since the end of December.
AMC shares were up 3.5% in early deals after jumping more than 300% in the past three weeks. GameStop shares rose 1.1%, while Vaxart was up 1.6%.
Shares of gaming equipment maker Corsair Gaming Inc jumped 12.5%. The company – which has a short interest of 18.25% of free float, according to Refinitiv data – was the top trending stock on Stocktwits, with a 26.9% jump in message volume.
(Reporting by Sagarika Jaisinghani and Aaron Saldanha in Bengaluru; Editing by Shinjini Ganguli)