What happened
Shares of Support.com (SPRT) are getting crushed Tuesday, trading down roughly 29.5% as of 2:20 p.m. EDT. Today's massive sell-off comes on the heels of a nearly 10% decline for the company's share price in Monday's trading.
The company's pending merger with Bitcoin-mining specialist Greenidge Generation had been a component in some investors' bull thesis on the stock. However, it looks like people are selling the meme stock on recent news of the merger's authorization.
Image source: Getty Images.
So what
Support.com has attracted attention from investors on Reddit's WallStreetBets forum seeking to trigger a short squeeze and benefit from the potential merger between it and Greenidge Generation, and its share price had surged as buyers poured into the stock. The company's share price hit a 52-week high of $56.69 last month thanks to these catalysts, but it has since pulled back substantially. The stock is now down roughly 68% from its one-year high.
Support.com shareholders voted on the company's proposed merger with Greenidge on Sept. 10 and came out in favor of the combination of the businesses. Some investors may have been holding out for the potential merger as a new catalyst to send Support's stock higher, but that doesn't appear to be panning out.
Trading on Support.com stock was briefly halted Tuesday due to the massive sell-off. Yet even with the incredible pullback, the stock is still up roughly 519% year to date.
Now what
Investors hoping to bank a quick profit appear to be moving out of positions in Support.com stock. For those still waiting on a renewed short squeeze, one potential bit of good news is that short interest in the stock is rising substantially again.
As performance for other meme stocks has demonstrated, it's hard to say what's next for Support.com stock with a high level of certainty. The company's core customer service, tech support, and security software businesses aren't in great shape, but it's still possible that business improvement stemming from the company's merger with Greenidge Generation or another short-squeeze push could drive the stock higher. Support.com is still a very risky investment, but there's a reinvention initiative here and a never-say-never element to meme stocks that can't be fully discounted.