The "Reddit Rally" is back for a second act, and a lot of the same stocks that blasted off early in the month are going along for the ride once again.
Audio equipment maker Koss (KOSS -0.22%) is among them, with its shares up more than 50% on Thursday morning.
While GameStop soaked up much of the attention in early February after a group of investors on the Reddit board WallStreetBets sparked a short-term rally, Koss was actually the better performer. Its shares jumped 1,800% in a single week, and peaked at 3,715% higher.
Koss has been around for a half-century, and its headphones at one time were state of the art. But the company had fallen on hard times of late, trading below $2 per share as recently as last year.
WallStreetBets, in looking for stocks, tried to find good candidates for a short squeeze, namely down-on-their-luck companies that a lot of investors were betting would lose value over time. Koss fit the bill, and the stock has been on a volatile ride ever since.
If these last few months have proved anything, it's that it isn't wise to make predictions about short-term price movements. But nothing has changed about Koss' fundamentals or business prospects to cause this jump. As my Foolish colleague Jeremy Bowman noted earlier in the month, Koss' business doesn't offer much reason for excitement.
It's hard to look away from these monster rallies, but for long-term investors, the best path forward remains identifying strong companies and holding their shares for as long as possible. Koss doesn't fit that bill for me, and I'd advise watching this play out from the sidelines.