$RKT meme stock short squeeze!$RKT stock has now skyrocketed 113.6% over the past three days, since the company reported better-than-expected fourth-quarter earnings and announced a special dividend of $1.11 a share. S3 Analytics said there has been a "large amount of short selling" into the stock's (RKT) recent rally, with short interest interest increasing to 47.9 million shares, or 45.8% of the public float. "RKT's stock price and short selling activity is reminiscent of another recent highflying 'meme' stock- appears to have garnered some bullish interest from day traders on Reddit’s infamous WallStreetBets.
it is near the top of the list of U.S. companies in terms of size of short bet by hedge funds, according to FactSet. That makes it a classic target by meme-obsessed investors, who have been storming together this year into shares and call options of heavily shorted companies in order to squeeze out short sellers. It was unclear of the size of the retail interest in Rocket at this time.
A number of popular posts on WallStreetBet chatroom featured Rocket on Tuesday. One says “I like RKT. $1.7M all-in, let’s gooo YOLO,” and it quickly drew more than 1,700 comments.
We expect the shares to normalize and again trade on fundamentals, however the timing is uncertain.” wrote Wells Fargo analyst Donald Fandetti
“Our beta-tested social media stuff right now picked up on yesterday some really just hugely bullish comments over on the Reddit board WallStreetBets again.
Najarian cited a jump in Rocket options trading volume following increased mentions on Reddit.
Meme-driven chatter on Rocket was not nearly as intense as seen on GameStop, according to AI firm Accrete.
The surge in Rocket could be a sign that the retail trading mania seen in GameStop earlier this year is still a factor.
When a stock with high short interest jumps sharply higher, it could force short sellers to cover their bearish positions in order to limit their losses. The short covering tends to fuel the stock’s rally further.
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