Finnish telecommunication manufacturer Nokia shares popped 38% today on the NYSE. Perhaps you would have expected some exceptional news? In fact, Nokia commented “Nokia is not aware of any material, undisclosed corporate developments or material change in its business or affairs that has not been publicly disclosed that would account for the recent increase in the market price or trading volume of its shares.”
So what is going on? Ethan Wolffe-Mann of Yahoo!Finance reports that Nokia was one of the stocks that surged as a result of being hyped on WallStreetBets on Reddit. A more publicized example of this phenomenon is GameStop – up another 135% today.
Many of these hyped stocks were caught in a short squeeze by hedge funds, forcing their stocks to pop. If you want to join in on the fun, be careful that you are not the last one in. Eventually the WallStreetBets gang will want to move their money on to another stock; then the “no longer hyped” stock’s price will return close to its previous level. The people who buy at the top are going to lose a lot of money on their GameStop – and Nokia – investments.
Nokia’s first half financial results are available here.