The social investing groups have started showing their ability to move prices either way by creating a significant increase in demand.
This is evident from the stunning share price rally of the several struggling companies since the beginning of this year as the members of the WallStreetBets subreddit has been calling to buy more and avoid selling.
Shares of GameStop (NYSE: GME) rallied 145% on Monday after short-selling firm Citron Research criticized the forum members and predicted a share price crash for GameStop.
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“The amount of people who are so passionate about putting GameStop higher not based on any fundamentals – it just shows the natural state of the market right now,” Andrew Left, the managing partner at Citron Research, said in a video.
The internet-fueled stock rally is expanding to several other stocks over the past week.
Koss, Express, Clovis, and BlackBerry stocks ‘pumped’ as well
Shares of BlackBerry (NYSE: BB) rose 110% since the beginning of this year even though the company is likely to post losses in 2021. The rally is only supported by patent settlement with Facebook (NASDAQ: FB).
What’s more, the WallStreetBets mebers have also supported the Koss Corporation (NYSE: KOSS) stock price rally, sending shares 80% higher on Monday and adding more than 50% to gains in post-market trading. The stereo headphones company has posted lower than expected results in the latest quarter and fundamentals have also not been supporting the share price gains.
Koss Corporation has generated $5.21 million in September quarter revenue, down 3.7% from the year-ago period.
Shares of Express (NYSE: EXPR) rose 131% in Monday trading without any fundamental change. The apparel retailer has generated poor results for the latest quarter and sales are likely to remain sluggish for the December quarter due to coronavirus.
Goldman Sachs former portfolio manager Will Meade tweeted that Koss Corporation and AMC Entertainment (NYSE: AMC) and Clovis Oncology (NASDAQ: CLVS) could be the next target of WallStreetBets members.
It’s true that solid fundamentals could help stock price breakouts but the emergence of social groups like the ‘Reddit army’ could create new trading trends in the future. However, technical analysts are suggesting investors to sell the position to capitalize on ‘Reddit-shilled’ stock price gains.
