Support.com (SPRT) has become the new “meme stock” retail traders are pushing to the moon. Shares of the LA based software company closed 33% higher, at $26.33 on Friday. The stock skyrocketed more than 190% earlier in the session and was the #1 trending ticker on Yahoo Finance.
‘The squeeze will continue and accelerate’
The stock caught the attention of retail traders last month based on its high short interest, which currently accounts for about 60% of the float.
“Shares shorted were climbing earlier in the month, but we have seen short covering recently as the shorts are in the middle of a big squeeze,” says Ihor Dusaniwsky of S3 Partners, adding, “The squeeze will continue and accelerate.”
Shares were trading above $9 a share on Monday. They touched a session high of $59.69.
“This rally is a long buying rally in a stock with a thinly traded float (20 million shares) and tremendous long buying pressure,” Dusaniwsky said.
“Gamma squeeze + momentum buying + some short covering = monster rally,” said Dusaniwsky.
SPRT shares were halted for volatility out of the gate this morning, seconds into the trading session. At one point Support.com’s market share had more than doubled, surpassed $1 billion.
Retail traders have been talking about the stock online. Youtuber Matt Kohrs, was fielding technical questions moments after a volatility trading halt on Friday.
“Can the SPRT squeeze help drive the hedgies to start the squeeze on AMC (AMC)?” asked one trader.
“I think so, yes, … and not even necessarily from the hedgies which are losing on it, but I’m thinking about the amount of money apes are making that will flow back into AMC and (GME),” said Kohrs.
‘Any short interest above 25% will get people interested’
“Any short interest above 25% will get people interested,” @redditinvestors told Yahoo Finance via Twitter.
Support.com reported its second quarter results on August 13th. Its revenue came in at $8.5 million, a decrease of 23% compared to the same quarter last year. The company reported a net loss of 3 cents per share for the quarter.
In March, Support.com announced a merger with Greenidge Generation, a bitcoin mining company. Upon completion, Support.com will become a wholly-owned subsidiary of Greenidge. The merger is expected to close in the 3rd quarter of this year.
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre