In this article, we discuss the 10 meme stocks Redditors are buying in April. If you want to read about some more meme stocks popular on Reddit, go directly to 5 Meme Stocks Redditors are Buying in April.
Meme stocks are once again in the spotlight in the finance world, merely a year after a short-squeeze saga involving GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings, Inc. (NYSE:AMC) that resulted in short-term losses worth more than $10 billion to the hedge fund industry. Shares of the two companies are up 97% and 35% in the past four weeks after losing value for most of 2021 amid inflation and a broader lull around growth stocks. Users of the internet platform Reddit are largely responsible for this resurgence.
According to research firm Vanda, in early January this year, even as the Fed announced hawkish policies to tame inflation, individual investors, which constitute an important market force in the digital age, bought more than $1.6 billion in equities, the highest since November 2021. The numbers also lay to rest reports that retail investors will “bore” out of the market as growth stocks get battered due to rising interest rates. The membership of the WallStreetBets forum, the premier retail investor forum on Reddit, is at an all-time high of close to 12 million.
Some of the stocks presently popular on Reddit include Meta Platforms, Inc. (NASDAQ:FB), Uber Technologies, Inc. (NYSE:UBER), and Netflix, Inc. (NASDAQ:NFLX). Daily posts on the forum, however, have fallen from a high of 64,000 in early 2021 to just around 1,000. Despite this drop, the rally in the prices of “meme” stocks indicates that retail investor activity at the stock market remains high. One of the centers of this activity is short-squeeze plays that Redditors tap in hopes of spoiling hedge fund bets.
This contest has a history. According to a study published by financial services firm IHS Markit last year, the most-shorted stocks on the market in January 2021 outperformed the least-shorted ones by a factor of close to 24%. Hedge funds have been tracking the activity of Reddit forums in response to coordinated bets that target shorted stocks. The balance of power in this fight is constantly shifting with neither side willing to concede. It is also increasingly shaping overall market dynamics.
Some of the big casualties of this retail investor versus hedge fund battle can be accessed here. From among the individual investor class, one of the most prominent winners has been Chinese billionaire Wang Jianlin. According to a report by news publication Bloomberg last year, the Chinese investor made more than $675 million from a meme stock rally in 2021. Wang Jianlin once purchased Spanish football club Atletico Madrid and aimed to create an entertainment empire to rival Disney across the globe.
Our Methodology
These were picked based around the hype on these firms on internet platform Reddit. Companies that have little going for them in terms of basic fundamentals and analyst ratings but have grown popular because of social media interest were preferred for the list.
A database of around 900 elite hedge funds tracked by Insider Monkey was used to quantify the popularity of each stock in the hedge fund universe.
Source:unsplash
Meme Stocks Redditors are Buying in April
10. Pintec Technology Holdings Limited (NASDAQ:PT)
Number of Hedge Fund Holders: N/A
Pintec Technology Holdings Limited (NASDAQ:PT) is a China-based firm that operates an online platform for financial services. Late last year, the company had received a notice from the NASDAQ exchange on non-compliance over the minimum price requirement. The closing price of the stock had been under $1 consecutively for a 30-day trading period before the notice was served. The company has been given a time period of around six months to regain compliance and remain listed on the index.
Pintec Technology Holdings Limited (NASDAQ:PT) was also hit as Beijing cracked down on dual-listed firms in the country. Over the past year, the shares have dipped by over 32%. Even as the crackdown nears an end, the shares have not gained significantly.
Pintec Technology Holdings Limited (NASDAQ:PT) stock gained prominently in late January after interest from retail investors on Reddit. This resulted in a brief rally that is losing momentum with each passing day.
Just like Meta Platforms, Inc. (NASDAQ:FB), Uber Technologies, Inc. (NYSE:UBER), and Netflix, Inc. (NASDAQ:NFLX), Pintec Technology Holdings Limited (NASDAQ:PT) is one of the stocks that retail investors are buying.
9. BitNile Holdings, Inc. (NYSE:NILE)
Number of Hedge Fund Holders: 3
BitNile Holdings, Inc. (NYSE:NILE) makes and sells power system solutions. On April 5, the company announced that it had invested around $127 million in a data center in Michigan for bitcoin mining operations. $114 million of this was spent to purchase bitcoin miners from BITMAIN Technologies. The firm plans to spend another $80 million on mining operations this year. In the past few months, as inflation rises and batters growth offerings, cryptocurrencies like Bitcoin have seen a sharp decline in value.
On March 15, Spartan Capital analyst Barry Sine initiated coverage of BitNile Holdings, Inc. (NYSE:NILE) stock with a Buy rating and a price target of $7, noting that investment in the stock was “to a major extent a leveraged investment in bitcoin” as the firm becomes a bitcoin miner.
At the end of the fourth quarter of 2021, 3 hedge funds in the database of Insider Monkey held stakes worth $2.4 million in BitNile Holdings, Inc. (NYSE:NILE).
8. Onion Global Limited (NYSE:OG)
Number of Hedge Fund Holders: 4
Onion Global Limited (NYSE:OG) is an internet marketing firm headquartered in China. In October last year, the stock had lost close to 30% in value after the firm announced plans for a $25 million private offering. The funds from the offering were to be used for working capital and general corporate purposes. As China cracks down on dual-listed firms, the stock has lost close to 80% in value over the past twelve months. Despite reports that the crackdown is easing, the shares have not appreciated much.
Perhaps the one positive for Onion Global Limited (NYSE:OG) amid a spate of bad news in the past few months was that it generated gross merchandise value of around RMB100 million during the new year shopping festival in China.
At the end of the fourth quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $6.2 million in Onion Global Limited (NYSE:OG).
7. Cassava Sciences, Inc. (NASDAQ:SAVA)
Number of Hedge Fund Holders: 7
Cassava Sciences, Inc. (NASDAQ:SAVA) is a clinical-stage biotech firm that focuses on the development of treatments for neurodegenerative diseases. One of the premier pipeline projects of the firm is simufilam, a drug for Alzheimer’s. Even though the CEO of the firm recently provided investors an update on the trials for this drug, noting that the firm had dosed 60 subjects across two Phase 3 trials for the drug, the shares continued to lose value. Last year, the trials came under controversy after concerns on the quality of studies on these drugs.
On April 1, Univest Securities analyst James Jang initiated coverage of Cassava Sciences, Inc. (NASDAQ:SAVA) stock with a Sell rating and a price target of $8, predicting that the Phase 3 trials of the Alzheimer’s drug of the company would not lead to commercialization.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Cassava Sciences, Inc. (NASDAQ:SAVA) with 1 million shares worth more than $46 million.
At the end of the fourth quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $14 million in Cassava Sciences, Inc. (NASDAQ:SAVA), compared to 10 in the preceding quarter worth $34 million.
6. Canaan Inc. (NASDAQ:CAN)
Number of Hedge Fund Holders: 8
Canaan Inc. (NASDAQ:CAN) markets integrated circuit systems and related products. The company is famous for products specializing in the crypto domain. However, amid a crackdown against blockchain tech in China and a blanket ban on cryptocurrencies, the firm has been forced to move most of its operations out of the country. However, it has recently unveiled a new coin mining machine, named Avalon 1266, as the crackdown eases and regulators allow tech firms some breathing space.
The fortunes of Canaan Inc. (NASDAQ:CAN) are tied to the broader crypto market. This can be frustrating for investors since the volatility associated with the crypto sector also seeps into the shares. In the past year, the stock has lost over 70% in value.
At the end of the fourth quarter of 2021, 8 hedge funds in the database of Insider Monkey held stakes worth $16 million in Canaan Inc. (NASDAQ:CAN), the same as in the preceding quarter worth $31 million.
Among the hedge funds being tracked by Insider Monkey, Hong Kong-based investment firm Ariose Capital is a leading shareholder in Canaan Inc. (NASDAQ:CAN) with 1.4 million shares worth more than $7.5 million.
In addition to Meta Platforms, Inc. (NASDAQ:FB), Uber Technologies, Inc. (NYSE:UBER), and Netflix, Inc. (NASDAQ:NFLX), Canaan Inc. (NASDAQ:CAN) is one of the stocks that Redditors are monitoring.
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Disclosure. None. 10 Meme Stocks Redditors are Buying in April is originally published on Insider Monkey.
