SOS Stock: How Redditors Are Fueling the Rise in SOS Today

With Bitcoin (CCC:BTC-USD) prices recovering near the $40,000 level, investors are regaining confidence in related stocks like SOS (NYSE:SOS). That is certainly one reason for the solid rally SOS stock this morning, as shares are up nearly 20%. However, it seems that there is another catalyst at play.

Concept art of crypto mining with little figuring and a Bitcoin (BTC) token.

Source: Shutterstock

So what do you need to know?

The cryptocurrency market, and therefore related stocks, have been in a place of chaos in recent days. Things largely started when Elon Musk took a jab at the high energy consumption of Bitcoin, which previously was a payment option at Tesla (NASDAQ:TSLA). Then, talk of further crypto regulations in China, including policies aimed at miners, introduced chaos.

For companies like SOS and peers Marathon Digital (NASDAQ:MARA) and Riot Blockchain (NASDAQ:RIOT), this has two impacts. The first is that the value of the digital assets are dropping. The second is that, as The Motley Fool highlighted yesterday, the revenue potential for miners drops. Together, these downside pressures have weighed on cryptocurrency stocks in recent weeks.

But things are starting to turn around. Bitcoin prices are recovering, and some metrics indicate that investor confidence is rebounding. One reason for this is an effort by Musk to introduce more transparency and ESG goals to Bitcoin miners. Another is that China-based miners are already making strategic changes, looking for opportunities to relocate to Kazakhstan, Afghanistan and beyond. This means that any coming regulations in China would have lesser impact, also boosting confidence.

However, it appears there is another story at play this morning that is lifting SOS stock.

Redditors Are Fueling the Crypto Craze in SOS Stock

This week has seen a resurgence in short-squeeze in interest, lifting r/WallStreetBets favorites like GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC). Sentiment on the subreddit rapidly shifted back in favor of these meme stocks, promising further pain for short-sellers. In fact, retail investors are already delivering that pain. On Tuesday, short-sellers lost nearly $750 million due to their bets on just those two stocks.

However, these two Reddit stocks have sparked ripple effects that appear to extend to SOS.

For those unfamiliar, SOS has also found itself at odds with short-sellers. Back in February 2021, Hindenburg Research took aim at SOS, alleging that it was a shell game and forging its operations in China. The retail crowd quickly sided with SOS, helping shares recover in the wake of the report.

Now, its history with Hindenburg seems to be earning the company a bit of short-squeeze juice. Posters on dedicated subreddits are cheering on the gains this morning as meme stocks come back into focus.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Sarah Smith is the Editor of Today’s Market with 

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