After a double-digit percentage decline in Tuesday’s trading, shares of Support.com (NASDAQ: SPRT) fall again. The stock was down around 19% in Wednesday’s 2 p.m. EDT session.
There didn’t appear to be any news specific to the company behind the sale. Support.com has emerged over the past two weeks as the latest “stock meme,” generating incredible gains as traders buy its shares in hopes of benefiting from the momentum of the short squeeze. The stock has skyrocketed, and even after retreating from its high, it is still rising in 2021, so it’s no surprise to see it give up more ground.
Despite a sharp decline in the past few days, Support.com stock is still up around 1.110% this year.
Support.com’s poor trading performance and bleak outlook has prompted short sellers to bet against the stock. However, the wave of new purchases from WallStreetsBets users and other retail investors has pushed the price up. This, in turn, forced the short sellers to buy back the stocks they had sold short in order to stem their losses, which pushed up the company’s stock price. So while the stock has recently foregone some gains, those who bet on the short squeeze have so far enjoyed fantastic returns.
Reddit’s WallStreetBets board and other investment-driven social media communities have become centers of power driving the market. Many traders participating in it favor battered and heavily shorted companies that might be able to post huge stock gains in the short term if enough people buy and hold stocks.
In addition to the near-term momentum, some traders are bullish about a potential push for Support.com into the cryptocurrency mining space. On September 10, its shareholders will vote on whether the company should merge with Bitcoin mining specialist Greenidge Generation.
Support.com’s customer service, technical support, and security operations have struggled, and a pivot to Bitcoin mining operations could open the door to a business turnaround. On the flip side, the stock is currently trading at levels that appear to be separate from the fundamentals of the company, although some potential benefits of this pivot are taken into account. For better or worse, the short-term price action of the stock will likely depend on how well it stays in favor of memes-oriented investors.
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