For the last few weeks, media coverage for Reddit’s WallStreetBets accelerated for a good reason. GameStop (GME) tried but failed, to retake the average $350 high set in Jan – Feb.
GME stock topped nearly $350 intra-day before settling to below the $250 range and above the key 20-day moving average. The spectacular volatility spread to Clover Health ($15 - $28.85). To a lesser degree, BlackBerry’s $20 spike and fall to $14.18 last week ended the flurry of trading.
The short float of 3.7% was not enough to sustain Wendy’s (WEN) stock price. Workhorse (WKHS), whose short float is now 40.5%, should squeeze the shorts. It will also create losses for bulls who overpay for the stock. WKHS stock has no fundamental support. It lost the USPS deal and has no other major contract bids ahead.
In the longer term, Workhorse will fall again. It has to pay for ongoing operating costs. Without any revenue, it will bleed money. Similarly, AMC Entertainment (AMC) needs to fill movie theatre seats every weekend just to pay the rent to property owners. REIT investors need not worry about unpaid leases. They already wrote down the amount AMC Entertainment
