Please ensure Javascript is enabled for purposes of website accessibility

This Unknown Nasdaq Stock Just Doubled Friday

By Dan Caplinger – Aug 27, 2021 at 2:11PM

Key Points

  • Markets surged on the Fed's stance on monetary policy.
  • got a huge boost unrelated to fundamental business factors.
  • Other high-growth stocks are better bets for the long run.

Motley Fool Issues Rare “All In” Buy Alert

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Yet there are better stocks to focus on.

Markets moved sharply higher on Friday, as investors reacted favorably to positive comments from Federal Reserve Chairman Jerome Powell at the central bank's symposium in Jackson Hole, Wyoming. That was especially good news for the growth-heavy Nasdaq Composite (^IXIC -0.52%), which was up more than 1% at midday on Friday.

It isn't every day that you see a Nasdaq stock double in value, but that happened on Friday. Below, we'll take a closer look at (SPRT) and what made it rise so much, along with examining some better-known stocks with more modest but still respectable gains on the day.

Getting Support

Shares of soared more than 130% at midday on Friday. The move followed a better than 40% rise for the fledgling software company on Thursday, and reflects a combination of factors that once again show that retail investors are playing a major role in how individual stocks move. has historically sought to provide outsourced customer support functions for business customers, looking to serve industries across the economy with voice, chat, and self-serve customer service functions. Yet the company took an interest in the cryptocurrency arena earlier this year, announcing a merger with crypto mining company Greenidge Generation. That has linked the company's fortunes to those of the cryptocurrency market, and with prices of many of the most-followed crypto tokens having recovered substantially in recent weeks, has gained more attention.

Person at a desk in a home office.

Image source: Getty Images.

In fact, that heightened visibility from retail investors might well have spawned the big move higher for Like many other stocks that retail investors have focused their efforts on lately, has a substantial following of institutional investors that are selling the stock short. That's reopened a playbook that individual investors have used on a number of occasions in 2021 to try to prompt a short squeeze, and that's a big part of why a stock that was priced at $2 per share as recently March is now sporting a share price 25 times that level currently.

As market participants have learned from the experiences of companies like AMC Entertainment Holdings and GameStop, share prices can stay at elevated levels for a long time even when there are substantial challenges that their underlying fundamental businesses still have to overcome.'s inconsistent profitability and falling revenue make it an unlikely candidate for a rebound, but that doesn't mean the stock won't keep soaring from here.

A good day for growth stocks

More broadly, growth investors reacted favorably to the Fed news. High-growth stocks benefit from the availability of cheap financing and the added value of future earnings from low interest rates, so the Fed's relatively dovish stance fits well with most of their business models. For instance, Coupa Software (COUP 6.38%) was up 6% early Friday afternoon, while GoodRx Holdings (GDRX -1.68%) picked up 5%.

Earnings also provided some boosts. Workday (WDAY -0.24%) climbed 10% after posting strong results on Thursday afternoon. Generally, software-as-a-service companies have fared well, and low rates help support the value of their recurring revenue far into the future as well.

Smart investors should focus more on the long-term prospects for proven successful businesses than on companies with weak fundamentals getting attention for technical reasons. The same stocks that double in a day can get cut in half the next for no additional reason, but great companies can often generate huge returns that will benefit investors for years to come.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Coupa Software and Workday. The Motley Fool recommends GoodRx Holdings, Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned, Inc. Stock Quote, Inc.
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$11,226.36 (-0.52%) $-58.96
Workday Stock Quote
$148.98 (-0.24%) $0.36
Coupa Software Stock Quote
Coupa Software
$62.69 (6.38%) $3.76
GoodRx Holdings, Inc. Stock Quote
GoodRx Holdings, Inc.
$4.69 (-1.68%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.