KOSS Stock: Why Short-Squeeze Star Koss Rallied 30% Today

Koss (NASDAQ:KOSS) shares rose to relevance last week amid a powerful Reddit stocks rally. With a short squeeze and hopes for a turnaround story, the old-school audio equipment maker soared. However, with the r/WallStreetBets bubble bursting, it seemed that KOSS stock was doomed. Did investors prove that assumption wrong today?

A Koss (KOSS) Porta Pro headset in a box.

Source: SiljeAO / Shutterstock.com

As a quick refresher, Redditors and other retail investors pushed GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) higher. Then, they rushed to find the next short-squeeze stocks. With a share price below $10 and short interest above 35%, KOSS stock was a perfect pick. Plus, the audio equipment company needed a turnaround story.

Koss has mapped a similar trajectory to GME and AMC. It faced similar bans and restrictions on Robinhood, and its price action has largely mirrored its peer Reddit stocks. Today, that trajectory took KOSS stock up nearly 30%.

But what happened? This morning, market commentators were declaring left and right that the Reddit stocks bubble burst. Short interest was falling, and investors were moving onto other opportunities. As they made their proclamations, share prices started to fall.

Although it is not entirely clear what caused the rally in KOSS stock, one possible answer comes from legendary investor Mark Cuban. Yesterday, Cuban told CNBC that he sees more short-squeeze rallies in the future. He says that as retail investors recognize their power, they will come back to try again. Perhaps today, those investors heard his message and decided to make his predictions come true.

What to Know About KOSS Stock

So what do you need to know about KOSS stock? To start, the audio equipment maker was not alone in its Wednesday rally. GameStop shares closed up slightly, as did AMC stock, Nokia (NYSE:NOK) and Express (NYSE:EXPR). This movement suggests that Cuban is right: As retail investors gear up for round two, we could see these Reddit stocks move higher again.

However, investors should still proceed with caution. These last few trading days are evidence of just how volatile the stock market can be. Today was a victory for KOSS stock, but the war may not be over. Do your own research and make sure you understand the risks here.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Sarah Smith is a Web Content Producer with InvestorPlace.com. 

Article printed from InvestorPlace Media, https://investorplace.com/2021/02/koss-stock-why-short-squeeze-star-koss-rallied-30-today-mark-cuban/.

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