With the eyes of both Wall Street and Main Street upon them, GameStop (NYSE: GME
) has garnered far more attention
in recent weeks than might be expected of a brick and mortar video game retailer. But when their daily volume exceeds that of Apple’s (NASDAQ: AAPL
) on the same day that the latter posts a $100 billion quarter, it’s going to be noticed
By now, most of us are familiar with the Reddit fuelled short squeeze that’s well underway in GameStop shares, which has sent them from $20 to over $375 in just two weeks. That’s an eye watering 1,700% based on little more than a heavily shorted float, huge online hype, and massive trading volume.
Wednesday’s session saw many online brokers “go down” during the trading hours, while also issuing bans on buy orders for GameStop shares. This smacks of market interference from the big players and suggests GameStop might have had its moment in the sun. But there are, as of the last count, more than 4 million subscribers to the now infamous Reddit forum “WallStreetBets” who will be hunting for the next stock they can try to start a short squeeze on. Here are 3 options that are sure to be on their watchlist.
National Beverage Corp. (NASDAQ: FIZZ)
Shares of National Beverage are up 150% in the past fortnight, as their 83% short interest as a percentage of the float ranks second only to GameStop. That’s not a bad start to the year for a company that reported year on year revenue growth of just 8% last month.
Their volume in recent weeks has gone through the roof, as shares have soared past the previous all time high and a scary looking double top from 2017 and 2018. Interestingly, Melvin Capital, which capitulated on its short GameStop position this week, reported a fresh long position in National Beverage stock as recently as November.
Department stores have caught their fair share of a recovery bounce in recent months on the back of the COVID vaccine rollout. But that can’t be credited with the 140% Dillard’s stock has seen in the past fortnight. Like National Beverage, their short interest is north of 80% of the float.
While shares popped to fresh highs yesterday, they did sell off into the close and finished the day down close to 10%. This doesn’t necessarily mean the bubble has burst though. Keep in mind that GameStop shares retraced a full 60% from their daily high on Monday, before tripling again by yesterday’s open. Deutsche Bank also raised their rating on the stock from Sell to a Hold this week, interesting timing to say the least.
Having been in a downtrend since 2015, shares of home retailer Bed Bath & Beyond are unsurprisingly also heavily shorted and boast a 70% short interest number. And though they came into January up 400% from May’s multi-year low, the 200% they’ve put on since can be attributed to our friends on Reddit.
Shares look set to open down on Thursday, with Bed Bath and Beyond having caught two downgrades this week already. Both UBS and Raymond James suggested now was a good time to take profits as there are little, if any, fundamentals underpinning the recent move. But as we’ve seen with GameStop, retail traders have realized the power they have if they work together, so you also wouldn’t bet against shares popping again from here.
Before you consider Bed Bath & Beyond, you'll want to hear this.
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