A couple of days ago, Redbox (NASDAQ:RDBX) received shareholder approval to merge with Chicken Soup for the Soul Entertainment (NASDAQ:CSSE). CSSE stock moved up this morning while traders digested this development. Since Redbox was likely a short-squeeze target earlier this year, Chicken Soup may be next in line for a Reddit-fueled run.
2021 was the year of the meme stock, but 2022 may provide a second act for short-squeeze traders. This summer, RDBX stock ran from $2 and change to $15. It’s difficult to prove this, but it’s certainly possible that Redbox was a short-squeeze target at that time.
Could CSSE stock get the same treatment? This question could be on the minds of eager traders due to the association between Redbox and Chicken Soup for the Soul Entertainment. In particular, Redbox’s shareholders approved a previously announced merger proposal with Chicken Soup.
As InvestorPlace Assistant Financial News Writer Eddie Pan explained, Redbox’s shareholders will receive 0.087 Chicken Soup shares for each share of Redbox they own. So, how did today’s traders react to this news?
CSSE Stock Has Meme-Worthy Potential
Within the first hour of trading, CSSE stock was in the green and pushing the key $15 level. Of course, it didn’t hurt that the major stock-market indices were up at that time.
Redbox has over 38,000 DVD kiosks across the U.S., but the company has had to deal with the trend of video streaming. On the other hand, Chicken Soup has interests in streaming via the Crackle brand.
Only time will tell whether the combination of Redbox and Chicken Soup for the Soul Entertainment can produce a positive synergy. Beyond the business-related considerations, though, traders in 2022 may be more interested in CSSE stock’s meme-worthy potential.
Chicken Soup is a fairly small company, and the company’s shares aren’t super expensive. So, maybe there are meme-stock possibilities here. Chicken Soup shares didn’t move like there’s a short squeeze in progress today. Still, the future is wide open, and traders might choose to take a position in anticipation of explosive price action.
On the date of publication, David Moadel 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.