Shares of so-called meme stocks favored by retail traders on Reddit’s WallStreetBets forum are showing mixed results today. While a name like retailer Express (NYSE:EXPR) continues to be highly volatile, trading in others including AMC Entertainment Holdings (NYSE:AMC) and cannabis company Sundial Growers (NASDAQ:SNDL) seems to have calmed some.
Express shares jumped almost 18% early in the session. As of 11:45 a.m. EDT, Express had pared some gains but remained up about 11%. AMC and Sundial were down 1.25% and 3.5% respectively at that time.
As has occurred off and on for much of 2021, the stocks favored by WallStreetBets users spike on high volume at times. Today, Express is on pace for about double its 65-day average trading volume as the price jumps. AMC and Sundial, however, are both trading with volume much lower than that recent average. It may be options trading making Express stand out today.
Trading in AMC seems to have slowed down in recent days. With its share price up over 2,500% year to date, the company ramped up activity selling shares to raise needed capital. AMC recently said retail investors now own more than 80% of the company, and CEO Adam Aron has been increasingly engaging directly with that group of investors. Most recently, Aron announced the company wants to add another 25 million shares for sale. Shareholder voting is under way to approve those additional shares.
Sundial has similarly raised about $1 billion in capital with its rising popularity and subsequent share price this year. Its stock has nearly doubled since the start of 2021, and the company says it will use its newly stocked balance sheet for acquisitions and growth.
Express’ stock is up nearly 700% so far in 2021, but options activity may signal investors believe it is not done moving higher. There has been high implied volatility in the stock’s July $27 calls recently, according to Yahoo! Finance. With the stock at a recent price of about $7 per share, that means some options investors expect a sharp spike in shares. That may be pulling other investors in today, explaining the double-digit percentage gains.
A group of investors seems to have entered the markets focusing on short-term moves in a handful of meme stocks. Today, the action is in Express, while it is subdued from previously active names including AMC and Sundial. Investors, as opposed to traders, can ignore this noise, however, and follow the longer-term stories of the underlying businesses.
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