Several Popular Reddit Penny Stocks Jump As GameStop Hearing Begins
Today markets a pivotal point in history for both penny stocks and blue-chips alike. No, it isn’t cannabis legalization or another round of stimulus. It is the cherry on the next phase in a storied saga of retail versus institutions. Unless you’ve been living under a rock this year, the biggest topic among financial headlines was the GameStop (NYSE: GME). Specifically, it was the short-squeeze and the rampant explosion in the stock market that ensued.
Big scores were made and big losses were seen but not by whom you might originally assume. In this case, the winners were the vast majority of retail traders joining together against “the suits”. Everyone from Mark Cuban to AOC took to social media seemingly backing the paramount event. Brokers soon began throwing wrenches into the mix. Everyone from Robinhood to Interactive Brokers put restrictions on trading certain stocks; many were penny stocks.
“We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AAL, $AMC, $BB, $BBBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. We also raised margin requirements for certain securities,” Robinhood stated in a blog post during the rampant buying spree in these same stocks.
Penny Stocks In Focus As U.S. House Financial Services Committee Hearing Kicks Off
For the roles played and media attention gained, Robinhood CEO Vlad Tenev, Melvin Capital CEO Gabriel Plotkin, Reddit CEO and co-founder Steve Huffman, Citadel CEO Kenneth Griffin and Keith Gill (a.k.a Roaring Kitty) testify in front of lawmakers.
They will ask about the tactics used by funds, including Melvin, and the reasons behind the stock trading restrictions at Robinhood. Before the hearing, committee head Representative Maxine Waters explained that they were looking at the hedge fund industry’s “long history of predatory conduct.” The committee will also focus on Robinhood’s decision to halt the trading of GameStop and other “meme stocks.”
Whether it was coincidence or not, several of these “meme stocks” evidently began climbing as the hearing began. The thing to remember is sentiment can play a huge role, and volatility remains a big factor to account for. Within the first few moments of Roaring Kitty’s remarks, GameStop shares took off soaring again. They soon came crashing back down. So if these are on your list of penny stocks, understand that these could be in for a wild session.
Reddit Penny Stocks To Watch
- Express Inc. (NYSE: EXPR)
- Nokia Corporation (NYSE: NOK)
- Zomedica Corp. (NYSE: ZOM)
Express Inc.
The last year for Express has been one for the history books. While EXPR stock attempted to recover from 2019’s drop, the coronavirus pandemic helped put a quick end to that recovery. The onslaught of selling wouldn’t steady until EXPR reached lows of $0.57 in November. In December, the sentiment surrounding Express began shifting toward a more positive one as vaccine headlines helped give brick-and-mortar retail stocks a boost. Now, I know Express also has an eCommerce platform, but a brand well-known for its anchors in malls across America makes it more brick and mortar than eComm (for now).
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Needless to say, EXPR stock caught a nice boost of momentum as a result. Then GameStop’s short-squeeze began. This had traders looking for other heavily shorted names; Express is one of them. The retailer’s shares ended up spiking from around $1 at the start of 2021 to highs of nearly $14 per share by the end of the month.
Obviously, things settled back down quickly in the wake of brokers like Robinhood restricting buying to this name. On Thursday, however, EXPR has begun to pop during the mid-day session with the GameStop hearing. Will this sympathy sentiment continue pushing EXPR this week, or will this be another flash in the pan for the retail penny stock?
Nokia Corporation
While it wasn’t as large of a spike compared to Express, Nokia also caught a mid-day surge in price on Thursday. As the hearing began, NOK stock aggressively bounced off of their intra-day lows of $4.05 and back above $4.10. Nokia was one of the later names to join the Reddit surge with traders expecting the communications company to experience an explosive move in the wake of market-wide short squeezes. While it did have it’s day in the sun, NOK was “only” able to reach a high of $9.97 before quickly retreating during the days to follow.
Nokia isn’t the typical “meme stock” so to speak. The company has continued advancing its reach in the 5G arena over the last few months. In fact, this week Nokia announced a new multi-year 5G radio and core contract with A1 Austria. The deal will see the company delivering nationwide coverage across Austria. A1 will also launch 4G and 5G network slicing commercially following a successful pilot.
“We have already worked collaboratively with A1 on a number of exciting projects and we take this expansion project as an affirmation that our technology is best-in-class. We look forward to embarking on this next journey as their trusted partner,” Tommi Uitto, President of Mobile Networks, Nokia, said.
Zomedica Corp.
Another penny stock with its own wild story is Zomedica. Long-before the meme wars and short-squeezes took headlines, Zomedica shares were climbing in anticipation of the commercial launch of its animal diagnostic device, TRUFORMA. Even hype was built up from a Cameo video that surfaced of Tiger King’s Carole Baskin mentioning the company and the device. With the Reddit army’s addition, ZOM went from a hyped-up stock among speculative traders to one that got international acclaim across multiple social media channels.
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The interesting part about Zomedica is that it didn’t pull back nearly as much as the meme stocks did. In fact, since its peak in February, ZOM shares have only dipped between 50 and 60 cents. On Thursday, shares continued its rebound from Wednesday’s lows. TRUFORMA is set for commercial launch this quarter and in anticipation of this, Zomedica recently closed a $173.5 million funding round. After full exercise of the over-allotment option by the underwriter, the raise proceeds came to $200 million at the end of the day.
Zomedica said it intends to use the proceeds for developing its diagnostic platforms, including making milestone payments, if any, as they come due, under its existing license and collaboration agreements. It also said funds would be earmarked for strategic acquisitions if or when they become available. Despite the negative sentiment stemming from the GameStop fiasco, in the short term, Zomedica seems to have weathered the storm so far, in advance of its planned commercial launch.
Penny Stocks On Reddit Continue Generating Attention
With millions of new Redditors created accounts daily, there’s definitely a lot of noise in the stock market today. It’s more important now than ever to do as much research as possible with this in mind. There’s nothing wrong with volatility as long as you know how to trade with it and profit.
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