Investors on Reddit and other social media sites appeared to ignite a trading frenzy in multiple stocks Monday.
Here's how some of the most popular Reddit stocks fared today:
- Naked Brand Group (NAKD), up 29%
- Bionano Genomics (BNGO -3.29%), up 24%
- Ocugen (OCGN -0.23%), up 20%
- Zomedica (ZOM 4.17%), up 20%
- Castor Maritime (CTRM 0.03%), up 11%
Investors have reason to be optimistic about all five of these companies.
Ocugen's partnership with Bharat Biotech gives it a 45% share of any potential profits that the India-based drug developer's promising COVID-19 vaccine candidate, Covaxin, earns in the U.S. Bionano Genomics' Saphyr genome mapping system could give doctors the ability to develop better treatment options for a wide array of diseases. And Zomedica recently initiated commercialization efforts for its Truforma diagnostic platform for cats and dogs.
Meanwhile, Naked Brand Group is in the midst of shifting away from its unprofitable brick-and-mortar stores and toward its higher-margin e-commerce operations. And Castor Maritime is using the coronavirus-induced downturn in the shipping industry to expand its fleet by scooping up discount-priced vessels.
Still, there wasn't much in the way of news today that would explain the sharp upward moves in these stocks. Instead, their heavy trading volumes suggest that traders on Reddit and other social media sites may be working together to drive up their prices once again by coordinating their purchases.
Social media-induced trading frenzies can produce staggering gains for investors. But they can also be short-lived. Owners of these stocks should thus brace for extreme volatility -- both to the upside and downside -- in the days ahead.