One of 2022’s most popular meme stocks is shooting up today. Microcap Clovis Oncology (NASDAQ:CLVS) has spiked by 30% as of this writing. Although its gains appear to be tapering off, it is hard to ignore this type of surge. Today’s company-specific news is that shareholders have rejected the proposed reverse split of CLVS stock.
While that news is certainly pushing the stock up, there is another catalyst that investors shouldn’t ignore. CLVS stock has been flagged as a top gamma squeeze candidate and is garnering significant traction on social media.
Is CLVS Stock the Market’s Next Squeeze?
Short analysis platform Fintel currently ranks CLVS stock as the most likely candidate for a gamma squeeze play. As SmartAsset states, a gamma squeeze occurs “when the underlying stock’s price begins to go up very quickly within a short period of time.”
That certainly applies to CLVS. The stock has risen nearly 60% in the past five days and 265% over the past month. It has jumped 9 places on Fintel’s gamma squeeze leadership board and boasts a score of 99.19.
The social media traction that CLVS stock is receiving, though, is likely due to Twitter influencer Will Meade. The short investor shared a screenshot this morning of Fintel’s top five rankings of both short and gamma squeeze stocks. He later shared an image of the stocks with the morning’s highest trading volume, of which CLVS stock ranked fourth.
Since Meade’s tweets went out, social media has been buzzing as investors tout CLVS stock’s gamma squeeze potential and marvel at its heavy volume. One user claimed it will “experience [a] gamma squeeze anytime soon” while another described it as “squeezing now.”
Some investors have made it clear they expect Clovis to break $3 per share very soon, and it looks poised to do exactly that. They see CLVS stock as the next big gamma squeeze, and they are pushing hard for the type of bullish plays that will make it happen. The impressive trading volume is consistent with the phenomenon.
What Comes Next for Clovis
As with any meme stocks that skyrockets on social media hype, there is one question that investors must ask: How long can CLVS stock keep rising? There’s no way to say for sure, especially when it is potentially in the midst of a gamma squeeze. But one thing that is easy to predict is that when this stock falls, it will fall hard.
We’ve seen CLVS rise on treatment trials and buyout rumors. But until an actual growth catalyst is confirmed, it will remain a meme stock that rises and falls with social media interest.
The crowd that put Gamestop (NYSE:GME) and AMC Entertainment (NYSE:AMC) on Wall Street’s radar is hard at work keeping CLVS stock in the green. When they lose interest, as they inevitably will, it will come crashing back down to earth. But for now, investors should be watching CLVS stock as this gamma squeeze runs it courses.
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On the date of publication, Samuel O’Brient 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.
