What happened

Only in today's world of retail trading could a computer gaming equipment company, a movie theater chain, and a glucose monitoring product manufacturer be in the same stock market discussion. But that's what's happening today, as shares of these three strange stock bedfellows are jumping. After soaring to higher levels, the following names have pared some gains. As of noon EDT, the moves were as follows:

So what

Corsair Gaming is one of the newer entrants into the group of stocks moving based on short interest and discussions in online forums. The stock of the maker of computer gaming equipment soared more than 30% early in today's session on more than 20 times its average daily volume. The reason wasn't anything to do with the business, but more likely the 18% of its share float sold short, as of the end of May. Senseonics Holdings is another heavily shorted stock moving higher on above-average volume today. And perennial meme stock AMC Entertainment continues to move on high volatility thanks to the WallStreetBets crowd. 

A young stock trader at home with chart on laptop.

Image source: Getty Images.

Now what

As the scope of WallStreetBets followers has expanded, more heavily shorted stocks are in the crosshairs of retail traders. The 30-day average trading volumes of Corsair, AMC, and Senseonics have all soared in the last month. 

AMC 30-Day Average Daily Volume Chart

30-Day Average Daily Volume data by YCharts

In that same period, company-specific news was almost nonexistent, or was directly related to what's been happening with the share price. AMC, for example, has sold shares to raise capital as the stock has gained. CEO Adam Aron even took to YouTube for an interview with Trey Collins on the podcaster's Trey's Trades channel. He pushed the idea of authorizing another 25 million shares to add to the pile of capital the company has raised as shares have jumped. Shareholder votes on that proposal will begin June 16. 

That doesn't mean there aren't also positive developments with these businesses. AMC is benefiting from the lifting of masking requirements as well as new movie releases. Corsair has tailwinds stemming from the popularity of gaming and esports. Senseonics had some recent positive trial results from its glucose monitoring system. The stock jumped on that news early in June. But that news was the trigger for the traders to continue to increase trading volume over the subsequent 10 days. 

Short covering seems to be the reason why these stocks are rising. Investors who don't want to trade constantly should focus on the business, and let the noise pass as the stocks will eventually settle to where the business itself belongs in value. In the meantime, the WallStreetBets crowd seems to be driving which heavily shorted names move on a particular day.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.