Meme traders already have rotated out of pet food and into people food this week, and then to another electric car maker.
It’s not even Wednesday.
Shares of Petco Health & Wellness Co. Inc.
soared Monday afternoon, but by Tuesday morning the focus was on B&G Foods, Inc.
as individual traders once again used viral social media campaigns to create a rally on a heavily-shorted stock, perhaps even creating a short squeeze headache for some hedge funds.
Individual traders banding together online can be fickle friends.
Specifically, Petco’s late day surge Monday, with shares popping more than 18% in the last 90 minutes of trade, failed to last into Tuesday morning, when retail investors already appeared to have moved on to B&G. The volume of social media comments about the pickles and relish giant went up almost 80,000% on Tuesday morning, according to data from HypeEquity, and the stock responded by jumping 5% in early trading.
As has been the case, heightened short action on both stocks appeared to light the meme trading spark. According to Fintel, Petco short sellers made themselves scarce after Monday’s rally, causing the short borrow rate on the stock to fall by more than third overnight. What looked like potential short covering might have dampened retail interest though, as HypeEquity reflected a severe drop in social media interest throughout Tuesday’s trading.
That detente might not last long though. Fintel data showed that the available short shares on Petco stock had been cut in half between Monday’s closing bell and Tuesday’s.
Short sellers have been similarly coy with B&G. While there were scant short shares available to borrow early Monday morning, there were about 4,275% more at Tuesday’s open.
As was the case with Petco and most memes in recent weeks, the fall in B&G’s stock price after the morning rally coincided with a falling interest on social media. But the trade might not be fully over as Fintel still ranks B&G’s short-squeeze score at just over 85, making it the 270th most-likely short-squeezed stock out of the almost 9,000 equities covered by the platform.
While all the fun with canned food and pet food may have fizzled Tuesday afternoon, fear not. The meme crowd of traders appears to have a new target that fits all the criteria.
Social media volume for electric vehicle-maker Canoo Inc.
popped more than 1370% on Tuesday, with the stock up by as much as 19%, before closing up 16.8%. Canoo’s short squeeze score of 92.3 made it Fintel’s 16th most-likely short-squeeze candidate as of Tuesday’s close.