Discovery (NASDAQ:DISCA,NASDAQ:DISCB) stock is raging higher on Wednesday in what could be another short squeeze for the mass media company.
According to recent reports, this new surge in DISCB stock is connected to Archegos Capital Management going under. Credit Suisse (NYSE:CS) appears to be handling block sales of certain stocks in connection to this. That includes class A and class C shares of Discovery stock.
So why does this have DISCB stock up today? It all comes down to buying practices. A short squeeze happens when sellers try to place pressure on a group, typically a hedge fund, that has shorted shares of stocks. Doing so sends the share price soaring and causes losses for the hedge funds.
Cases of short squeezes have been happening much more lately with the rise in retail traders using social media to communicate. This is what kicked off the meme stock buying trend earlier this year that pushed GameStop (NYSE:GME) stock to the moon.
So how exactly is this affecting DISCB stock today? Well, the stock is definitely seeing heavier trading than normal. As of this writing, more than 406,000 shares of the stock have changed hands. To put that in perspective, the daily average trading volume of the stock is only about 34,000 shares.
To go along with that increase in trading is a higher price for shares of the stock. DISCB stock was up 48.2% as of Wednesday afternoon. The stock is also up roughly 221.8% since the start of the year. It’s worth pointing out that DISCA stock isn’t rising alongside DISCB stock.
Investors seeking out more information about stocks on the move Wednesday are in luck.
InvestorPlace.com covers the stock market daily with a wealth of valuable information for investors. That includes some of the biggest movers on the stock market, such as Palantir Technologies (NYSE:PLTR), Xpeng (NYSE:XPEV), and Bit Digital (NASDAQ:BTBT). Investors that want to learn why these shares are heading higher today just have to check out the following links.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.