Rocket Companies (NYSE:RKT) is going parabolic today, plunging more than 30% after blasting 71% higher on Tuesday. RKT stock is trading at a fast and furious pace today, with more than 157 million trades on the day at time of writing, compared with an average daily volume of 17.75 million trades.
The primary catalyst for today’s drop was a note by RBC Capital Markets analyst Daniel Perlin, who downgraded RKT stock to “sector perform” from “outperform.” Per that note, “risk/reward [in Rocket Companies stock] is now more balanced, if not skewed to the downside.”
Rocket Companies’ stock has been particularly volatile since reporting strong Q4 2020 earnings and announcing a special dividend on Thursday. Tuesday’s price action saw RKT stock push higher than Perlin’s price target of $30 after receiving a high volume of Reddit mentions on Monday, probably due to the stock’s high short interest.
Wednesday’s drop is also notable because competitor UWM Holdings (NYSE:UWMC) is up more than 10% today, similarly buoyed by increasing U.S. Treasury bond yields and retail investor interest. That contrast has some suggesting that the bubble around RKT stock might have burst.
On the date of publication, Vivian Medithi did not have (either directly or indirectly) any positions in the securities mentioned in this article.