Penny Stocks On Reddit See Explosive Momentum On Wednesday
What do penny stocks, Reddit, Twitter, a frog emoji, and ice cream have in common? If you were to say GameStop (NYSE: GME), you’d be 100% correct but let me explain.
Hopefully, you know about the beginning of the Robinhood/Reddit saga from earlier this year. If you aren’t, I’ll give you the 30,000-foot view. In January, users on the now infamous subreddit, r/WallStreetBets, put a thesis together on GameStop following several interesting “findings.” This included a previous bet that we discussed back in 2019 when famed Big Short investor Michael Burry originally took a stock position. GameStop also saw growing interest from Chewy Inc. (NYSE: CHWY) co-founder and former CEO Ryan Cohen.
If you read our article “Penny Stocks Get Big Boost From r/WallStreetBets & Reddit Buying Spree,” you’ll remember why Cohen is an integral piece to this puzzle. In a similar move to Burry and about a year after, Cohen also bought up a large chunk of GME stock, accumulating over 12% of the company by December 2020. He also pushed the company to focus on digital sales instead of retail. Redditors on WallStreetBets started praising the move by GameStop. He’s now sitting on the company’s Board.
The Frog, The Ice Cream Cone, & A Tweet
In a crazy twist of fate, Cohen is back in the spotlight as a catalyst of sorts. Wednesday’s afternoon session was relatively status quo. The market continued recovering from Tuesday’s sell-off, industrials, and energy stocks were steadily rising, and GameStop wasn’t even a thought…until the 2 o’clock hour. This was when Cohen put out a cryptic tweet:
That’s right. It was a tweet with two simple things: 1 frog face emoji and a picture of a McDonald’s vanilla soft serve ice cream in a cone. Just for reference, there weren’t any drastic changes in the trading action of McDonald’s (NYSE: MCD) stock at the time the tweet was made.
In any case, for whatever reason, almost all of the Reddit penny stocks that previously had their trading limited by Robinhood and other brokers began skyrocketing. Are we on the verge of another round of massive short squeezes, or is this the ultimate headache after eating that ice cream tweet too fast…(I tried)?
Reddit Penny Stocks To Watch
Sundial Growers Inc.
All of these penny stocks have one thing in common, which is reddit breakouts. However, aside from this hype, these companies also have real fundamental things going on that may be of interest after the excitement dies down. Furthermore, I’d like to point out that these aren’t just good things but also potential risks, as you’ll see with Sundial.
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