Today, investors in Bionano Genomics (NASDAQ:BNGO) and BNGO stock had a very nice green day. Shares of BNGO stock closed the day 9% higher as volatility continued to pick up among various speculative stocks.
While many meme stocks saw a down day today, Bionano’s move higher is indicative of shifting sentiment on this company. Indeed, BNGO stock is getting a lot of love on various social media message boards right now. Sifting through the commentary of various sites, we can see a narrative building around BNGO stock being the latest and greatest short squeeze play to get into.
Indeed, the investing world has completely changed. The rise of zero-fee investing has brought about an army of day traders looking to make a quick buck. Accordingly, the traditional buy-and-hold, long-term, conservative, fundamentals-oriented investing style of old is out. Retail investors want to trade like hedge funds. And trade away they are.
Let’s take a look at whether Bionano has what it takes to be the next meme stock.
BNGO Stock Moving on Short Squeeze Speculation
As with any potential short squeeze play, investors must consider how heavily shorted said company is. In the case of Bionano, the percentage of this company’s shares sold short sits a sliver above 13%.
Indeed, that’s high. But questions remain as to whether this percentage is high enough for the “apes” (as they affectionately call themselves) to orchestrate an effective short squeeze. Typically, companies with short interest ratios around 20% or higher are better targets. However, in this day and age, enough attention given to one specific stock could drive the price up to a level where others feel enticed to take the other side of the trade. Such a scenario could result in a self-fulfilling prophecy where this company’s short volume ratio goes up. That remains to be seen.
For now, social media-related hype is what investors appear to be relying on with respect to BNGO stock. At the end of the day, this is a real business with real fundamentals and growth prospects. However, these important details don’t seem to matter. Whether or not investors get in on Bionano today largely seems to depend on which side of the fence investors sit. Accordingly, investors need to be aware of the risks and potential rewards of taking a position in BNGO stock today under these circumstances.
On the date of publication, Chris MacDonald 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 InvestorPlace.com Publishing Guidelines.