I’ll give the crowd over at Reddit’s r/wallstreetbets (WSB) credit where it’s due… They know how to get traders excited.
After gaining notoriety for short squeezing hedge funds in names like GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC), the online forum has been the stock market’s biggest hype machine this year. And “the apes” refuse to go away.
This time, the retail army is hawking shares of ContextLogic Inc. (Nasdaq: WISH) — owners of the low-end online retail website Wish.com.
If you’re not familiar with Wish.com, it’s the kind of place where you’ll find Chinese knock-offs of brand name clothes and gadgets for $5. Another $6 in shipping and three weeks later, you’ll find out just how cheap this crap really is.
In typical fashion, once word got out that WISH was on the forum’s hit list, the stock catapulted over 16% higher on Monday.
The momentum continued into premarket trading Tuesday, where shares surged another 7% to the upside.
But this isn’t the typical short-squeeze meme play we’ve grown used to from the self-described “degenerate” investors…
And traders thinking about buying WISH now should know what they’re getting into before they’re caught in a WISH pump and dump.
This time, WSB’s talking points on WISH center around how much the company has been beaten up since its IPO, making the meme stock out to be more of a traditional buy-and-hold, value play situation.
As of June 22, short positions only make up 6.59% of the float.
Compare that to Reddit’s two biggest success stories, GameStop and AMC, which have short interest of 20.57% and 22.81%, respectively…
With a squeeze highly unlikely, if traders want the stock to move up after this round of YOLO bets bidding up the stock, they’re going to need another catalyst…
And with its next earnings date in August, the only people making quick money here are traders selling the hype…
Or as I call it, the WISH pump and dump.
Check out the short video below and I’ll show you exactly what I’m talking about, and why traders should be wary of a WISH pump and dump right now.
As always, you can follow me on social media @lanceippolito on Twitter and Instagram. And don’t forget to subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video!
P.S. Decades of experience with top hedge funds like Bear Stearns have earned Joy of the Trade Head Trader Jeff Zananiri the nickname “The Master Trader.”
He used this exact strategy with linked stocks to turn $5.1 million into over $700 million during his career on Wall Street.
And now he’s giving Main Street traders all of the details on how they could use linked stocks to potentially make big money off the markets!