In this article, we discuss the 10 Reddit stocks that tripled in 2021. If you want to skip our detailed analysis of these stocks, go directly to the 5 Reddit Stocks that Tripled in 2021.
The impact that internet platform Reddit has had on the finance world is often overshadowed by discussions around retail investors and their investing strategies. Even though retail investors have influenced market dynamics to a surprising extent this year, lifting “meme stocks” to record highs, the valuation of Reddit itself has been boosted amid the spotlight as well. According to a report published by The Wall Street Journal, the company recently raised around $700 million at a funding round that pushed the valuation over $10 billion.
One of the leading investors of the funding round was Fidelity Investments, a financial services firm based in Boston that runs one of the most popular online stock brokerages in the United States. Fidelity contributed $400 million to the round, perhaps influenced in part by the massive influx of users that came to the Fidelity platform through Reddit recommendations. Although Reddit is still unprofitable, the firm did raise advertising revenue to $100 million in the second quarter of 2021, marking a small milestone in the quest to catch up with big tech giants.
Some of the stocks presently popular on Reddit include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), among others discussed in detail below.
Our Methodology
These were picked based on the hype around the companies on different Reddit forums. The stocks that registered a year-to-date increase of at least 300% were preferred for the list.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Photo by Adam Nowakowski on Unsplash
Reddit Stocks that Tripled in 2021
10. GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders: 9
Year-To-Date Gain: 960%
GameStop Corp. (NYSE:GME) markets gaming and entertainment products. The stock has benefited from the recent rise in video game sales around the globe as new versions of blockbuster titles like Far Cry are released just before the holiday season.
Crypto news platform CoinDesk recently reported, citing job listings, that GameStop Corp. (NYSE:GME) was building a Web3 arm using the Ethereum blockchain network that would be used to market gaming and NFT products.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. (NYSE:GME) with 2.1 million shares worth more than $373 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), GameStop Corp. (NYSE:GME) is one of the stocks attracting the interest of retail investors.
In its Q1 2021 investor letter, Rhizome Partners, an asset management firm, highlighted a few stocks and GameStop Corp. (NYSE:GME) was one of them. Here is what the fund said:
“The first quarter saw some bizarre market reactions. Game Stop is a heavily shorted legacy video game retailer that saw its stock price rise from $17 to a peak of $483 within a month. It appears that retail investors on a Reddit.com forum called WallStreetBets used memes to create a viral feedback loop of forced buying. Game Stop reached $20 billion in market cap and had more daily trading volume than Apple at one point. The Game Stop short squeeze became a black swan event for the short sellers. Large hedge funds such as Melvin Capital suffered 50% losses during a short period and required emergency capital injections that resulted in costly dilution. Shorting is difficult and introduces a risk of ruin. This is especially true in situations where a large percentage of the float is shorted. We want to remind you that we hedge our portfolio via index puts, sector puts, and sometimes buying puts directly in our own portfolio companies. However, we rarely short because 1) we are not good at it 2) the potential for brain damage is too high and 3) we want to avoid the risk of ruin.”
9. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Holders: 17
Year-To-Date Gain: 1,675%
AMC Entertainment Holdings, Inc. (NYSE:AMC) owns and runs theatres and movie screens. The company has moved to accept new crypto coins as payment in recent weeks, with CEO Adam Aron saying it will soon start accepting the novel Shiba Inu coin as well.
Citi analyst Jason Bazinet has a Sell rating on AMC Entertainment Holdings, Inc. (NYSE:AMC) stock with a price target of $6. The analyst believes the stock is overvalued at current levels despite positive sentiment after the release of the third quarter earnings of the firm.
At the end of the third quarter of 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $252 million in AMC Entertainment Holdings, Inc. (NYSE:AMC), down from 21 in the preceding quarter worth $404 million.
In its Q4 2020 investor letter, Mittleman Investment Management LLC, an asset management firm, highlighted a few stocks and AMC Entertainment Holdings, Inc. (NYSE:AMC) was one of them. Here is what the fund said:
“AMC Entertainment (AMC) was our only material loser in Q4, dropping from $4.71 to $2.12 (-55%). I planned on discussing here why it was worth at least the $10 per share that my recently reduced estimate of fair value claimed, but since then AMC raised more cash against their UK holdings and then the stock took off due to speculative players from reddit.com getting involved, so we sold it all around $14 during the last week of Jan. 2021. This was a modest profit for most clients, but a loss for some others, depending on when the account began, so check your statements to see where you came out. And yes, I recognize it as being a dose of good luck, which I heartily accept from the universe as it seemed somewhat lacking in the portfolio of late. After the sale of AMC in late January 2021, our exposure to the movie theater business is now exclusively in Canada via Cineplex, which has a 75% market share and much less leverage on its balance sheet.”
8. Upstart Holdings, Inc. (NASDAQ:UPST)
Number of Hedge Fund Holders: 23
Year-To-Date Gain: 413%
Upstart Holdings, Inc. (NASDAQ:UPST) owns and runs a cloud-based lending platform that uses artificial intelligence technology. The company has a market cap of $17 billion and posted over $240 million in revenue last year.
Upstart Holdings, Inc. (NASDAQ:UPST) recently launched an Auto Retail software that includes AI-enabled financing. The company already has relationships with top auto firms like Toyota, Honda, Subaru and Ford who use the Upstart platform to sell new and used cars.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Third Point is a leading shareholder in Upstart Holdings, Inc. (NASDAQ:UPST) with 12.4 million shares worth more than $3.9 billion.
In its Q2 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Upstart Holdings, Inc. (NASDAQ:UPST) was one of them. Here is what the fund said:
“During the quarter, we purchased Upstart Holdings Inc. Upstart is an artificial intelligence (AI) and cloud-based lending platform. The company uses AI models to underwrite superior loans with lower interest rates, lower default rates, higher approval rates, and increased underwriting automation. Consumers can access Upstart-powered loans through its banking partners’ websites; however, most of its loans are underwritten on Upstart.com. Upstart has a fee-based revenue model and retains only a small portion of the loans, while the majority of the loans end up on the balance sheets of its partner banks or are sold into the capital markets. We believe Upstart’s technology is superior to the FICO score, which is ubiquitous within the consumer credit markets. With an excellent product and a large total addressable market, we believe that Upstart’s prospects are bright.”
7. Avis Budget Group, Inc. (NASDAQ:CAR)
Number of Hedge Fund Holders: 26
Year-To-Date Gain: 674%
Avis Budget Group, Inc. (NASDAQ:CAR) provides car and truck rentals. The stock has rallied sharply amid interest from Reddit users in the past few months who often use the keyword “moonshot” to help identify their favorite picks.
Morgan Stanley analyst Billy Kovanis recently raised the price target on Avis Budget Group, Inc. (NASDAQ:CAR) stock to $140 from $100 but kept an Underweight rating, underlining that the firm delivered against high expectations in the third quarter.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm SRS Investment Management is a leading shareholder in Avis Budget Group, Inc. (NASDAQ:CAR) with 18.4 million shares worth more than $2.1 billion.
6. Hut 8 Mining Corp. (NASDAQ:HUT)
Number of Hedge Fund Holders: 10
Year-To-Date Gain: 343%
Hut 8 Mining Corp. (NASDAQ:HUT) is a Canada-based cryptocurrency mining company. The stock has staged a comeback after slumping since April as Bitcoin and other coins lead a rally around the crypto industry in general.
Hut 8 Mining Corp. (NASDAQ:HUT) recently posted earnings for the third quarter, reporting earnings per share of C$0.15 and a revenue of C$50 million, up more than 760% year-on-year. The share price of the firm jumped 9% after the release of the earnings report.
At the end of the third quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $43 million in Hut 8 Mining Corp. (NASDAQ:HUT), up from 4 in the preceding quarter worth $2 million.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), Hut 8 Mining Corp. (NASDAQ:HUT) is one of the stocks on the radar of hedge funds.
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Disclosure. None. 10 Reddit Stocks that Tripled in 2021 is originally published on Insider Monkey.
