Reddit stocks are back in a big way, with GameStop (NYSE:GME), AMC Entertainment (NYSE:AMC), Nokia (NYSE:NOK), BlackBerry (NYSE:BB), Express (NSYE:EXPR) and Koss (NASDAQ:KOSS) leading the way higher. With r/WallStreetBets calling for these favorite names to hit the moon, what do you need to know? And why are these stocks rallying once again?
Once again, the story starts with GME stock. Yesterday, investors learned that GameStop CFO Jim Bell will resign on March 26. And importantly, those familiar with the arrangement say it is part of a bigger turnaround story.
Remember, before we had rocket ship emojis and diamond hands, activist investor Ryan Cohen was talking about e-commerce business models. The Chewy (NYSE:CHWY) founder started to flex his muscles and talk of a turnaround thesis. In fact, he said that with help, GameStop could one day rival Amazon (NASDAQ:AMZN). Bell stepping down helps make those dreams a reality. As we wrote yesterday, GameStop could fill his C-Suite seat with someone with more experience in tech and commerce.
And just like, that rally in Reddit stocks started.
This morning, top names from the first iteration of the frenzy all shot higher. Retail investors like these companies for their turnaround narratives, and for their high short interests. Now, with a second rally underway, some on r/WallStreetBets are calling for an even more powerful short squeeze. One Redditor suggested this time, GME stock could hit $800. If we learned anything from the first go-around, anything is truly possible.
So what else do you need to know? As the after-hours hype in GameStop and other top names started yesterday, Reddit was down for many customers. After identifying and solving the problem, the popular social media platform is back up and running.
Reddit Stocks, WSB and Short Squeeze 2.0
So what else do you need to know right now?
The first thing is that talk of another short squeeze did not magically appear on Wednesday. Redditors, analysts and legendary investors have all acknowledged the potential for what is unfolding today. In fact, Mark Cuban created a temporary spike in Reddit stocks earlier in February when he told retail investors huge short potential was on the horizon. Now, his words look like a priceless prediction.
The other thing to keep a close eye on is trading platform Robinhood. With its Congressional testimony just in the rear-view mirror, it will likely find itself in the spotlight again. However, following a trading halt in GME stock by the New York Stock Exchange, the company has already spoken out. It shared on its Twitter (NYSE:TWTR) yesterday information about the halt. Most importantly, it clarified that any trading restrictions came from the NYSE, not its app.
Is a second Reddit stocks rally giving the power back to the players? Only time will tell.
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.