What happened
Shares of GameStop (GME -2.40%), Express (EXPR), and Newegg Commerce (NEGG -3.58%) all rose 10% or more in trading Tuesday as the stock market rebounded sharply after yesterday's sell-off.
So what
There was no company-specific news to account for the strong performance. But they all have been designated so-called meme stocks that have ardent backers among retail investors, and they tend to exhibit extreme volatility on good news, bad news, or no news at all.
Image source: Getty Images.
Each of the stocks has been the subject of internet chatter. The most notable, of course, is GameStop, which was perhaps the first stock that traders on the WallStreetBets subreddit rallied around earlier this year, setting off the frenzy that continues to this day.
Now what
The primary point of contention for the stocks was the level of short interest in the shares, which was grossly inflated at the time. The trio of stocks all still carry elevated numbers of shares sold short compared to those outstanding, though they have diminished substantially since then -- except for Newegg, which only recently began trading as a public company.
Its stock got dragged into the whirlwind after trading in options became available, but were hard to obtain, sending shares skyrocketing. Now some 30% of its shares are sold short.
GameStop has 14% of its stock sold short while 11% of Express' stock is shorted.
With the market roaring back from yesterday's tumble, it's not surprising this trio would also spring to life.
