Meta Materials (NASDAQ:MMAT) is one of the most popular short squeeze plays this summer. The stock has been locked in a pattern of booms and busts ever since the 200%-plus short squeeze it saw back in June. Now, investors are looking for MMAT stock to take off once again, and today’s price movement suggests that a new surge could be afoot.
What Happened With MMAT Stock?
In the aftermath of the massive short squeeze in June, institutional short sellers are seemingly laying off of MMAT stock. Currently, only about 7% of the play’s float is being sold short; that’s not negligible, but in terms of the squeeze plays retail investors have been hunting down, it’s small potatoes.
That’s why today’s gains are relatively surprising. Buyers have seemed to mobilize on the stock en masse this morning. Nearly 77 million shares of the stock are trading hands today. That is far beyond MMAT’s daily average volume of 26 million. Since the stock jumped over $1 in value at the market’s open, many buyers have been motivated to add more shares to their portfolios. A lot of the retail investing phenomena that 2021 is seeing is driven by “FOMO buys,” or stock purchases that an investor makes for fear of missing out on future big gains.
As a result of this influx of buyers, the stock has catapulted upward with impressive speed. MMAT stock is currently up about 7%.
So What?
This price movement matters because it gives investors insight into just how well short squeeze investing is working to stimulate small cap stocks. With the first major short squeeze coming back in January via GameStop’s (NYSE:GME) huge price boom, many expected the investing fad to have died off. Rather, it’s quite the opposite; investors have a well diversified portfolio of these meme plays like MMAT, Naked (NASDAQ:NAKD), AMC (NYSE:AMC) and others.
Specifically to MMAT, the movement shows that investors aren’t leaving the stock yet. As more pile in, the likelihood of a squeeze-fueled boom increases. That’s a symptom part of the FOMO economy.
What Comes Next?
Next, investors buckle in and wait for the boom. The worst case scenario is that the stock falls back to its Friday price and short squeeze investors nurse their wounds. Part of the game is taking losses in some places and winning in others.
Meta Materials does have some fundamental strength on its side. This can make investors just a little more faithful than it is to other meme stocks. As InvestorPlace’s Chris MacDonald reports, the company is assembling a new scientific advisory board, which includes some renowned members of the science community.
On the date of publication, Brenden Rearick 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.
