Shares of Sgoco (SGOC) - Get Free Report surged on Monday as investors continued to push so-called meme stocks higher on expectations that momentum as well as sales and earnings potential can raise the valuations of lesser-known, lesser-proven companies.
Sgoco shares jumped more than 100% in early trading amid retail-trader touts on Reddit and StockTwits. Carver Bancorp, another meme-stock name, rose more than 16% following a three-day gain that saw its share price rise 170% last week.
Other meme stocks including Millendo Therapeutics (MLND) - Get Free Report and Exela Technologies (XELA) - Get Free Report also traded higher, though AMC Entertainment (AMC) - Get Free Report and GameStop (GME) - Get Free Report shares were both lower.
Meme stocks in general have been back in the spotlight amid calls on message boards including Reddit and Stocktwits to bid them higher, in some cases irrespective of any news or changes in underlying fundamentals like higher sales and earnings.
Marin Software (MRIN) - Get Free Report shares took off last week amid touts on Reddit message boards and other platforms to collectively push back against a potential short squeeze.
"Do not sell!!!" one poster said on Stocktwits. "Wayyyy to low price for selling."
Jim Cramer: How Newegg Differs From GameStop, AMC
Newegg Commerce (NEGG) - Get Free Report also saw its shares ride the rollercoaster meme-momentum wave last week, with its stock soaring 148% on Wednesday and then plunging nearly 50% between Thursday and Friday.
In Newegg’s case, TheStreet's Jim Cramer, in a tweet last Wednesday, called the stock a “total BGL game,” referring to when stocks are bagged, gunned and liquidated. Newegg is an online electronics retailer.
At the same time, others are increasingly pointing out that momentum trading – betting a stock will rise based on momentum rather than on an in-depth analysis of its intermediate - or long-term prospects compared to its current price – is nothing new, and that Wall Street labeling such activity “meme trading” is offensive.
“Every Ape, Reddit investor and retail trader has their own thoughts behind the moves they make and where they put their money,” wrote TheStreet and RealMoney contributor Katherine Ross.
“One thing is for sure, though: These investors are here to stay post-pandemic.”
Katherine Ross: Let's Demystify the Reddit Retail Investor