Today, shares of Discovery (NASDAQ:DISCA, NASDAQ:DISCB) are up big. At the time of writing, DISCB stock is up more than 90%. That said, investors will note DISCA stock is currently trading flat for the day.
Now, that’s a massive discrepancy. Accordingly, investors may want to know what’s going on with Discovery right now and what’s behind this large divergence.
So, let’s dive into what is driving DISCB stock higher today.
DISCB Stock: Another Short Squeeze?
An interesting report from Zero Hedge today highlights the idea that DISCB stock is yet another short squeeze underway.
The thesis? Because Discovery’s Class A shares were the ones block traded due to the Archegos Capital Management margin call-related liquidation, and these shares are much more liquid and trade in higher volumes, the company’s Class B shares were a better short-squeeze target.
It appears a significant amount of social media interest has built around the stocks sold as a block trade via the Archegos margin call. Traders want in on any stock that could be potentially squeezed. Right now, it looks like the squeeze is on — in full force.
Retail investors have found strength in numbers, and appear willing to exploit any opportunities in the market today. Accordingly, it appears traders are riding their coattails right now and getting in on the action.
An interesting quote from the Zero Hedge article reads:
The Bottom Line on Discovery
The recent mayhem provided by the Archegos block sale earlier this week is providing a trading opportunity. Indeed, it appears DISCB stock is yet another of a myriad of targets pursued by social media-savvy investors.
For those looking to get in on this trade, a few words of caution. This sort of volatility works in both directions, so it’s unclear how long this upside momentum will last. Indeed, the implied volatility on DISCB stock right now is extremely high. A bet in either direction could turn out poorly for those betting too big, so staying on the sidelines may be the best choice.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.