Wallstreet Bets

Last week, Securities and Exchange Board of India issued a press release detailing its crackdown on social media-based market manipulation schemes. In this episode, Sebi raided a number of premises and made seizures that revealed an impressively large social media operation. This gang was operating nine Telegram channels with a total of 5 million subscribers. The modus operandi of the operators was that they would buy large positions in some stocks, then use their following on social media to trigger large scale buying and when the prices shot up, they would unload the stocks at a large profit.

• Reddit’s WallStreetBets forum entered the mainstream at the beginning of 2021 during the GameStop craze. 
• Driving stocks like GameStop and AMC, retail investors congregating on the subreddit are a force in the stock market.
• These are the 10 most popular stocks WallStreetBets is talking about right now.

Following which stocks Reddit’s WallStreetBets crowd is talking about was a tactic that paid off handsomely in 2021, as several have gone through epic rallies and heightened

volatility

. 

From GameStop to AMC Entertainment, the more than 11 million-member forum has driven the conversation in so-called meme stocks that have exploded higher amid overwhelming demand from retail investors. The surge in stocks with shaky fundamentals has led to several hedge fund blowups that were caught on the opposite side of the trade betting against the company in question. 

GameStop’s short-squeeze, driven in part by the WallStreetBets crowd, led to a more than 50% drawdown in multibillion-dollar hedge fund Melvin Capital. Meanwhile, the sharp rally in struggling movie theater chain AMC Entertainment caused billions of dollars in losses for short-sellers in May and June.

But since those short-squeezes caused destruction for some short sellers, shares of GameStop and AMC Entertainment have fallen by about 60% from their record highs as investors begin to confront the fundamental backdrop behind the companies.

As traders look to replicate the success of WallStreetBets stocks, one data aggregator is compiling the most mentioned stocks on Reddit’s forum. 

These are the top 10 stocks Reddit’s WallStreetBets forum is focused on right now, according to data compiled by SwaggyStocks. The list is based on mentions over the past 24 hours, and financial data is sourced from Koyfin. 

10. Meta Platforms

Ticker: FB
WallStreetBets Mentions Over Past 24 Hours: 124
Market Capitalization: $508 billion
One-Week Performance: -1.0% 

Justin Sullivan/Getty Images

9. Cloudfare

Ticker: NET
WallStreetBets Mentions Over Past 24 Hours: 152
Market Capitalization: $27.3 billion
One-Week Performance: -7.0% 

Chinnapong/Getty Images

8. Amazon

Ticker: AMZN
WallStreetBets Mentions Over Past 24 Hours: 159
Market Capitalization: $1.44 trillion
One-Week Performance: 7.9% 

Nicolas Economou/NurPhoto via Getty Images

7. Nio

Ticker: NIO
WallStreetBets Mentions Over Past 24 Hours: 160
Market Capitalization: $21.7 billion
One-Week Performance: -19.7% 

NIO

6. AMC Entertainment

Ticker: AMC
WallStreetBets Mentions Over Past 24 Hours: 194
Market Capitalization: $7.0 billion
One-Week Performance: -11.4% 

Noam Galai/WireImage/Getty Images

5. SoFi Technologies

Ticker: SOFI
WallStreetBets Mentions Over Past 24 Hours: 194
Market Capitalization: $6.6 billion
One-Week Performance: -16.8% 

Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

4. Apple

Ticker: AAPL
WallStreetBets Mentions Over Past 24 Hours: 374
Market Capitalization: $2.45 trillion
One-Week Performance: -2.2% 

Spencer Platt/Getty Images

3. Tesla

Ticker: TSLA
WallStreetBets Mentions Over Past 24 Hours: 591
Market Capitalization: $769.6 billion
One-Week Performance: -3.4% 

Associated Press

2. Alibaba

Ticker: BABA
WallStreetBets Mentions Over Past 24 Hours: 664
Market Capitalization: $210.8 billion
One-Week Performance: -22.3% 

Thomas Peter/Reuters

1. GameStop

Ticker: GME
WallStreetBets Mentions Over Past 24 Hours: 1,270
Market Capitalization: $6.0 billion
One-Week Performance: -21.0% 

John Smith/VIEWpress/Getty Images

Last fall President

Nayib Bukele

and his team of cryptocurrency experts announced that El Salvador would soon offer a 10-year, $1 billion bitcoin-linked bond. According to the pitch, half the proceeds would be used to build the infrastructure of “Bitcoin City,” powered by low-cost geothermal electricity that could be used to mine bitcoin from a location near the Conchagua volcano. The other half of the money would be used to buy bitcoin. Investors would receive a 6.5% coupon and, after five years, they would participate in the appreciation of bitcoin via a dividend. The proposed bond is supposed to trade on Bitfinex, an exchange not accessible to Americans.

The details of the bond remain uncertain because there is still no prospectus or offering circular. Nevertheless, in February the chief strategy officer for the tech firm handling the offering told The Wall Street Journal that El Salvador already had verbal commitments for $500 million. He expressed confidence that the government’s decision to adopt bitcoin as its legal tender last September would generate the sizzle necessary to raise the rest.

The bond was expected to come to market this month. But on Tuesday Finance Minister

Alejandro Zelaya

announced that it would be delayed due to unfavorable market conditions. Perhaps that’s an elegant way of saying that once the hype died down, investors did the math and opted out.

Let’s stipulate that bitcoin’s rules-based regime, eliminating central-bank discretion in the creation of money, has value. More broadly, the blockchain technology that cryptocurrencies use to record ownership of an asset on a decentralized ledger is a highly beneficial innovation that goes well beyond the monetary realm.

That said, El Salvador’s new law making it mandatory for merchants to accept bitcoin as payment, despite its volatility, reeks of authoritarianism. The government’s Chivo wallet—where Salvadorans who don’t want to hold the bitcoin they are forced to accept can exchange it for a government-issued stablecoin backed by the full faith and credit of El Salvador—would seem to defeat the purpose of using a cryptocurrency to escape central banking.

The nation has resisted. A January survey of small and medium-size businesses by the Chamber of Commerce and Industry of El Salvador found that 86% of respondents said they had not made any sales in bitcoin. Not surprisingly, most people don’t want to hold next month’s rent in it or in Mr. Bukele’s fiat digital money.

Mr. Bukele’s bond looks rather unappetizing even for those who wish to speculate on bitcoin or hold it for long-term appreciation.

To start with, El Salvador’s country risk is sky high. Mr. Bukele, who took office almost three years ago, says the country will pay its debts. But markets are not so sure. The 2032 dollar bond was yielding better than 19% last week. In downgrading El Salvador’s long-term foreign-currency default rating to junk last month, FitchRatings noted that “increasing risks from high and growing financing needs” are estimated to reach $5.4 billion, or 18% of gross domestic product, in 2023.

Last week Mr. Zelaya confirmed that the bitcoin bond won’t be issued by the government of El Salvador. Instead, he said, it will be debt of a small geothermal company called LaGeo, a subsidiary of the state-owned electricity company CEL.

Pay no attention to that, Mr. Zelaya insisted. Whether “it is issued by LaGeo or by the Salvadoran state, in the end it is always a debt of the state.” He didn’t mention that with LaGeo as the creditor, El Salvador avoids adding more liabilities to its balance sheet that already has a debt-to-GDP ratio of 85%.

Mr. Zelaya also reaffirmed his expectation that the offering will be oversubscribed. But if the written bond contract, yet to materialize, is the same as the government has verbalized, it’s hard to see the upside for bond investors with licit funds to put to work. They won’t have an equity stake in Bitcoin City, so even if it booms their best outcome remains reliant on the price of the coin and the credibility of the debt issuer.

Investors can bet on bitcoin elsewhere without taking Salvadoran risk and being barely compensated for it. Plus, as economist

Frank Muci

at the London School of Economics observed on March 16, the bonds will be “governed by El Salvador law, not New York law, which is bad given that President Bukele just packed his country’s supreme court.”

In other words, good luck collecting if the bitcoin bond goes bust.

Write to O’Grady@wsj.com.

This year, Barron’s annual survey of online brokerages is appearing at a particularly uncertain moment. For many younger investors, this kind of turbulence is alien. The global financial crisis occurred more than 13 years ago. And with the exception of the short, if steep, Covid-related downdraft in March 2020—a period before many of today’s investors bought their first stocks—almost an entire generation has witnessed a steady, upward trajectory in equities.

It has been a rude awakening. Millions of eager young investors piled onto trading platforms for the first time in 2020 and 2021. They were often attracted by slick, easy-to-use trading apps and mesmerized by the din of the crowd, amplified on social media. This crested in early 2021, when online message boards, primarily Reddit’s WallStreetBets, whipped up a frenzy for beaten-down issues such as retailer

GameStop (ticker: GME) and movie-theater chain

AMC Entertainment Holdings (AMC). So-called meme trading was big news. Now, it seems like a quaint bit of pandemic diversion.

Are investors prepared? These markets require sober analysis and reflection, not emotional chatter. Investors need sophisticated strategies and accurate analytics, not off-the-cuff peer pronouncements. This creates demand for websites that can integrate market data with personal holdings, filter expectations, and perform multiple tasks quickly and efficiently. The best brokerages attempt to meet these challenges and more. Others, well, fall short.

This year marks the 27th annual Barron’s Best Online Brokers Survey. For the first time, we included financial-technology apps in the official mix. We selected the three most prominent to review:

Robinhood Markets (HOOD), Webull Financial, and

SoFi Technologies (SOFI). To make room, we dropped SogoTrade, TradeStation, and TradingBlock, brokerage sites that failed to attract the numbers boasted by the leading financial-technology companies, or fintechs, or to achieve much in earlier rankings. We made another addition: a big bank. After declining to participate over the past two years,

JPMorgan Chase’s (JPM) J.P. Morgan Self-Directed Investing agreed this year to participate in the survey. And, once again, Vanguard chose not to cooperate. In all, we reviewed a dozen trading sites.

As we did last year, we conducted remote interviews with all of the firms, which ran demos of their sites. They also responded orally and in writing to 80 survey questions. We then independently worked through their platforms. The assessments reflect a baseline understanding of what is on offer, which improvements have occurred over the past year, and which deficiencies still exist.

As we explain in our description of our ranking methodology, we continue to put a premium on brokers that offer effective, well-designed tools for mainstream, self-directed investors. If mobile-only sites suffer, so do brokerages that exclude elements that are necessary for an active trader or investor. Our top-rated brokers reflect the depth and complexity of markets and investors.

The top brokerages appeal to the widest possible range of users in ways that continue to impress. None surpasses

Interactive Brokers Group (IBKR), which took first place for the fifth year in a row. This time, the Greenwich, Conn.–based operation won by a 13-point margin over runner-up Fidelity Investments, which had tied for first two years ago and was a close second last year.

E*Trade and

Charles Schwab (SCHW) tied for third , while TD Ameritrade came in at fifth place. Compared with its showing in last year’s rankings, Schwab jumped two positions and E*Trade one, while TD Ameritrade fell by two. Schwab owns TD Ameritrade, while E*Trade is a unit of

Morgan Stanley (MS).

Merrill Edge ran close behind in sixth place, narrowly topping tastyworks in seventh. Webull checked in at a very respectable eighth.

Thereafter, the totals drop substantially. Ally Invest came in ninth, followed by Robinhood and J.P. Morgan, tied for 10th. SoFi brought up the rear.

Most brokerages’ scores improved. We’d like to think this is less a case of grade inflation than of continually building new features, technologies, and insights atop a solid base—in other words, getting better.

They did so despite facing major challenges. None was bigger than accommodating millions of first-time traders, an onslaught that began in 2020 with Covid stimulus checks, lockdowns, and stay-at-home boredom, and only accelerated in early 2021. “Meme trading, for all its silliness, further propelled the growth of retail investing, which had taken off in 2020,” says Christopher Larkin, managing director, digital brokerage product at E*Trade. “That was an industrywide growth pattern that we all saw and one we just didn’t expect.”

While almost all brokerages recorded dramatic increases in customers, the lion’s share of scrutiny fell on Robinhood, whose number of users nearly doubled in the first half of last year to 21.3 million, a remarkable number. Robinhood went public in July. According to the company, 50% of its users last year were first-time investors.

That kind of meteoric trajectory took its toll. During the height of the meme trading frenzy, Robinhood struggled to handle the volume, volatility, and clearinghouse-deposit requirements. In late January 2021, it was forced to restrict trading on a handful of meme stocks, including GameStop and AMC. That triggered regulatory scrutiny, lawsuits, and lots of bad will. And, at the time, Robinhood didn’t have a customer-service telephone line.

Robinhood lost four million users in 2021’s second half. Some dropped out; others switched. “We have a saying that Robinhood is their first account; Webull is their second,” says Webull CEO Anthony Denier.

Over the past few years, much has been made of the rapid growth of fintech apps and how they stack up against traditional brokerages. These apps tend to be long on looks and feel, and short on substance. This comes at a price, with critics warning about apps that make trading stocks a game like legalized sports betting and as easy as downloading a movie.

“The area fintechs always excel in is design. They’re making things simple to understand. They’re using accessible language. The experience is intuitive,” says Jen Taylor, senior director of research at Corporate Insight, a financial-services research and consultancy firm. “Where they lag is in the volume of information.”

However, it’s not necessarily a straight fintech/online brokerage dichotomy. Webull aptly demonstrates that a fintech potentially can rival online brokerages in substance as well as looks. Denier says the distinction extends from the site’s capabilities to its clientele: “Our type of trader is similar to that of a [TD Ameritrade’s active site] thinkorswim customer that utilizes these advanced tools, charts, to try to be a smarter trader, try to make better intraday trades, longer-term decisions based on charting, on real analysis, rather than what people are talking about on Reddit.”

The rise of fintechs underscores the muscle—both realized and potential—of younger investors. Brokerages are grappling with how to attract, educate, and accommodate this generation. Mobile-centric sites are just one manifestation. The use of social media is another. Fidelity, for example, launched its own subReddit and TikTok channels over the past year, and is an avid Instagram user. “The goal is to make saving and investing feel more accessible and relevant to potential clients in a more approachable way,” says Scott Ignall, head of Fidelity’s retail brokerage.

Approachable and comprehensive: a tricky balance. Brokerages report that even relative newcomers are jumping into options trading, a trend that is likely to grow if markets continue to gyrate. Increased access to micro-futures products boosts demand. “We have more customers trading futures and forex and opening new futures and forex accounts than ever before,” says Adam Hickerson, a director at Charles Schwab Futures & Forex.

That means brokerages must offer more-directed primers on options and the other products—ones long on explanation and short on jargon but sufficiently clever to gain usage.

The fintech/brokerage binary isn’t the only one. Most entities started as brokerages and developed as such. Some, however, were created as parts of much larger financial institutions. We surveyed three of these: Ally Invest, J.P. Morgan Self-Directed, and SoFi Invest. They all market their investing as part of a broader financial-services continuum, and their websites and mobile apps are set up this way. Therein lies the problem. Investing is just one of several equally weighted products. A savings account or a mortgage figures as prominently on them as a brokerage account.

While these financial-services companies push an overarching site, some brokerages are moving in the opposite direction and coming out with more-specialized apps. Interactive Brokers, for example, has recently unveiled two—one that focuses on socially responsible investing, the other on global markets. According to Taylor, this development is, in some ways, a throwback to a strategy of a decade ago that was dropped in favor of a single app. “It will be interesting to see how that plays out,” she says.

While brokerage mergers have slowed, some big names are still working through postmerger integrations. In 2020, Charles Schwab acquired TD Ameritrade, and Morgan Stanley bought E*Trade. Early last year, United Kingdom–based

IG Group Holdings (IGG.UK) acquired tastytrade, tastyworks’ parent. How successful these deals are will help determine the future of self-directed investments. That’s especially true for the Schwab–TD Ameritrade combine, which potentially could become a single online brokerage even more dominant than the two are now, as they operate separately.

Brokerages continue to shop for acquisitions that can provide specialized products or expertise. One example: direct indexing, the ability to track an index through sampling individual stocks, instead of relying on mutual or exchange-traded funds. Wealthy individuals and institutional investors have engaged in direct indexing for years, through separately managed accounts, or SMAs. Interactive Brokers already offers direct-indexing tools for self-directed clients, and Fidelity announced that it will launch a direct-indexing product in coming months for a minimum investment of $5,000.

A number of specialized companies excel in this area. Schwab led the way when it bought Motif in 2020. Last year, Morgan Stanley grabbed one of the field’s notables, Parametric Portfolio Associates, by acquiring Parametric’s parent, asset manager Eaton Vance. Vanguard bought Just Invest, and JPMorgan Chase acquired 55ip.

In September, Schwab filed documents saying it was launching a pilot project in direct investing SMAs, with a rollout expected this year. Schwab’s minimum investment is $100,000 and will be marketed through financial advisors, but many expect the company to eventually use the technology for self-directed investors, a task made easier by fractional-shares trading.

In mid-March, Schwab also launched a suite of 45 thematic stock lists, joining that ever-growing trend. Thematic investing is just another sign of self-directed traders demanding more control over their portfolios.

And, of course, there are cryptocurrencies, which are steadily gaining in interest, if not always in activity. To date, the online brokerages are divided. Independents are eagerly offering Bitcoin, ether, and other cryptos; Interactive Brokers is the latest. But firms that are part of bank holding companies simply can’t, prohibited by at least three U.S. government agencies. But many say they are formulating plans to do so once the government flashes the green light.

Email: editors@barrons.com

Photo by Markus Spike on Unsplash

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

The stars arguably aligned for the retail trading community in 2021.

Whether it was the rise of commission-free brokers, the attraction to unconventional income spurred by the pandemic, the meme stock phenomenon, and/or the combination of all, 2021 provided the right ingredients to spearhead the greatest rise in retail trading the world has ever seen.

The Retail Renaissance – as some like to call it – did more than just make for some fun on Reddit; it showed the prowess of the retail community and its effect on the financial markets. Aside from disrupting the stock price trajectories of Tesla Inc. (NASDAQ: TSLA), Bed Bath & Beyond Inc. (NASDAQ: BBBY), Wendy’s Co. (NASDAQ: WEN) and numerous others, the retail community became an unexpected force against some trading institutions.

In an interview by Coalition Greenwich between June and September 2021, 42% of investing firms said retail investors had some negative impact on achieving their trading objectives. An examination of Cboe Global Markets Inc.’s (BATS: CBOE) 2021 Option Flow report describes the nuances of this larger finding. For example, the report notes that daily total option volumes records were set 17 times during the year, including 10 days of over 50 million traded contracts. 

Overall, 9.78 billion contracts traded over 252 sessions, 32% above the 2020 record of 7.47 billion contracts and more than double 2019’s total of 9.8 billion.

“Across product types, Index and ETF (exchange-traded fund) options saw moderate growth of 10% and 6%, respectively, while single stock options flow jumped more than 50%, building on the remarkable increase seen in 2020 when single stock options trading jumped 68%,” the report says.

“Notably, the 51% increase in single stock option volume greatly exceeds the volume increase in shares underlying those stocks for the year, which was approximately 5.2%.”

This last statistic may tell us something unique: The Retail Renaissance has been driven not just by stock purchases but also by options contracts. In fact, current levels of 1-lot flows – single contract option trades – are nearly six times the average seen five years ago and include a mix of retail, professional retail and institutional traders using algorithms to minimize market impact and optimize trading costs.

Statistics from other sources reflect the rise of options alongside retail investors. A report by the Alphacaution Research Conservatory, for example, stipulates that retail investors account for more than 25% of total options trading activity.

While retail numbers have decreased from their 2021 peak, the retail community remains alive, active and eager to learn. However, to posit an educated guess as to whether the good times keep rolling or not for the retail community, it could be valuable to look at newer tools aimed at retail traders.

As one of the largest options exchanges in the world, Cboe tracks the retail community’s progress and is creating what it hopes will be empowering instruments for the retail sector.

For 2022 and beyond, it has reported a host of products aimed at facilitating this community’s growth and leveling the playing field in the financial markets. 

Cboe: Minis, Nanos And Option Analyzers

To reportedly address affordability and complexity issues, Cboe created Mini and Nano Options.

Cboe’s Mini-SPX and Mini-Russell 2000 (MRUTSM) Index provides investors with access to S&P 500 and Russell 2000 options contracts – and all their benefits – at one-tenth the size. Aside from their affordability, these options can introduce tax benefits, decrease dividend risk and decrease risk arising from stock-settled options. You can read more about Cboe’s Minis and their potential benefits here. 

Cboe’s Nanos take it one step further. Addressing affordability concerns, Nanos trade on Cboe as a $1 multiplier option on the Mini-SPX Index, which is 1/10th the value of the S&P 500 Index. This is a contrast to the $100-multiplier that standard option contracts have. Altogether, this means investors will have a derivative that is a thousand times cheaper than its standard counterpart.

Cboe says it has attempted to reduce the complexity of standard options contracts with Nano contracts. Nanos℠, for example, will have fewer strike prices, shorter expiration cycles and will settle in cash instead of shares.

Working alongside Cboe’s Nanos and Minis, Cboe’s Options Trade Optimizer aims to further simplify the investment process by protecting an investor’s most valuable commodity: time. By leveraging its features to test and evaluate trading ideas, investors can identify actionable options strategies, trade probabilities and potential returns on investments.

Time will tell if other large financial institutions and market-makers will increasingly look to the retail sector, but the fact that a player such as Cboe, among others, is willing to invest in the long-term capabilities of retail traders could point to a trend of a longer renaissance than perhaps was expected ever before.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

Nanos trade on Cboe as a $1 multiplier option (versus a $100 multiplier for standard options) on the Mini-S&P 500 Index, which is 1/10th the value of the S&P 500 Index.

You should consult your personal tax advisor to understand potential tax consequences of trading Nanos.

There are important risks associated with transacting in any of the Cboe Company products discussed here. Before engaging in any transactions in those products, it is important for market participants to carefully review the disclosures and disclaimers contained at http://www.cboe.com/options_futures_disclaimers.

Readers should understand that the authors were compensated by Cboe for the preparation of this article, which is not intended to be used in connection with the offering for purchase or sale of any product. The information in this article is for informational purposes only and no statement within this article should be construed as investment advice or a recommendation to buy or sell a financial product. The authors and Cboe make no representation as to the appropriateness of XSP, MRUT or Nanos options for any investor. Neither the authors nor Cboe assume any responsibility for any losses you might suffer by reason of investing in XSP, MRUT  or Nanos options. 

A cursory glance at this list of the top trending stocks on the Reddit’s r/WallStreetBets subreddit quickly yields an obvious fact: 2022 has not been kind to that grouping of Reddit stocks.

In fact, six of the seven most trending stocks are down to begin the year.

Of course, that doesn’t mean that they will stay that way. As the common SEC disclosure rule 156 notes, past performance is not indicative of future results. Trends don’t hold indefinitely, and that’s what we’ll look at in this article. 

That rule is mostly meant to dissuade investors from chasing gains. But, on the flip side, some investors also use past performance to make speculative investments. Falling stocks don’t always fall forever and many investors attempt to time low prices.

Given that the top trending r/WallStreetBets stocks are almost all down in 2022, that’s what we’ll be doing: Judging whether these Reddit stocks should logically rise moving forward

• Virgin Galactic (NYSE:SPCE) 
• Palantir Technologies (NYSE:PLTR)
• Tesla (NASDAQ:TSLA)
• Lucid Technologies (NASDAQ:LCID)
• IronNet (NYSE:IRNT) 
• Canoo (NASDAQ:GOEV) 
• SoFi Technologies (NASDAQ:SOFI)

Reddit Stocks: Virgin Galactic (SPCE)

Virgin Galactic is down approximately 40% in 2022. That of course isn’t a great way to begin a year. But I don’t see any reason for it to immediately rebound. There are a few reasons why that should be the case. 

Most importantly is that Virgin Galactic still remains relatively far from commercialized space flight. Back in late February Barron’s reported that the company was climbing on the news. That article characterized it as a positive catalyst for the company. The idea that the company still plans to begin space flight sometime in the fourth quarter should bolster share prices throughout 2022. That’s the central thesis, anyway. 

But Q4 is quite far away. And in the stock market prices move drastically over the span of a few quarters. If Virgin Galactic gives any hint that commercial flight will be delayed, it drops further. That means Virgin Galactic is still simply a bet.

The company hardly made any revenue in the most recent quarter. It posted $141,000 in Q4 and nearly $3.3 million in revenue in 2021. That changes drastically when operations begin. But the point is that operations remain far away.  

Palantir Technologies (PLTR)

Palantir Technologies should rise because it has sustained growth in front of it and a low price point currently. Does that indicate that recent prices are absolutely at their lowest? No. Identifying a price bottom is not something anyone can do with repeated accuracy. 

But given that Palantir has given guidance that annual revenue growth should stay at or above 30% through 2025, the future does indeed seem bright. It’s hard to imagine that investors will continue to punish it given such positive expectations.

PLTR stock became a publicly traded entity in September 2020 and its prices are now near IPO levels. It doesn’t deserve to trade there given how much it has grown and how much growth it predicts in the future. 

Yes, Palantir is still losing money. The company posted a $520.38 million net loss in 2021. But that result was drastically better than the $1.166 billion net loss it suffered in 2020. Growth stocks will have their season again and Palantir’s growth expectations make it hard to ignore. 

Tesla (TSLA)

Tesla should trade sideways because investors have no way of reliably predicting what inflation and increased prices will mean to its bottom line. Musk queried his Twitter (NYSE:TWTR) audience about inflation expectations while discussing increases at his own companies. 

At the same time, Tesla has raised prices across its range of vehicles in the range of 4% to 7%. So, Tesla has pushed its own problems onto consumers as most companies do during inflationary periods. 

Price increases aren’t without precedent at Tesla. Similar price hikes didn’t hurt Tesla last year and its stock price traded higher in late 2021. But this period feels qualitatively different as consumers experience the worst inflation in the past four decades. This could be a round of price hikes that Tesla’s consumer base finally balks at. 

Even if they don’t balk and sales levels remain it may be that inflation simply hurts the bottom line. Tesla’s price increases might not smooth over the effects of inflation. In other words, the bottom line could suffer due to inflation even if everything else remains as it is. 

Reddit Stocks: Lucid Technologies (LCID)

Lucid makes are list of Reddit stocks as big losses combined with earnings disappointments indicate that now is not the time to invest. 

But let’s start with the earnings disappointment and work our way back to overall losses. The problem for Lucid begins with disappointing revenue figures. The EV upstart generated just under $26.4 million worth of sales in the fourth quarter of 2021. That meant that the company fell more than $10 million short of expectations 

A revenue miss doesn’t help Lucid’s case but operational and net losses should truly concern investors now. Lucid’s fourth-quarter operational loss of $485.7 million wasn’t that far from the $599.2 million operational loss it posted through all of 2020. And its Q4 net loss of $1.046 billion actually exceeded its $719.38 million net loss in all of 2020. 

LCID stock may be trading well below analyst consensus expectations but there’s too much trouble now to have confidence that it can move up quickly. 

IronNet (IRNT)

IronNet could rise simply because it is a global cybersecurity firm in tenuous times. That is a reference to an increased threat as the war in Ukraine continues.

As sanctions continue the risk of cyber threats rises: “While there are no specific or credible cyber threats aimed at the U.S. currently, in February the Cybersecurity and Infrastructure Security Agency (CISA) warned that destructive malware against organizations in Ukraine may spread to businesses in other countries, especially as sanctions continue.”

That’s the catalyst that underlies a bullish thesis on IronNet right now. The company fell short of expectations last quarter but there is growth ahead. IronNet is trending but prices have slipped in 2022. I can’t see any definitive evidence that IronNet should perform well despite current catalysts given that it fell short last quarter.

Canoo (GOEV)

Canoo is a reasonable bet for short sellers. And short interest sits at a very high 36.2% right now so investors are betting that it should decrease in price. 

Investors who are hoping that GOEV stock will rise soon should probably think otherwise. That’s because a major shareholder sold off a large quantity of Canoo stock on March 16. Global Holdings Ltd. sold 10.5 million shares at $6.53. That’s not a particularly positive sign and GOEV shares are trading lower following the news. 

The news of insider selling comes on the heels of a 9-cent-per-share earnings miss a few weeks ago. Investors should be hard-pressed to find any positives in that string of negative news. That strongly implies that Canoo’s troubles shouldn’t abate any time soon.

If it had already fallen behind other EV firms, consider this an indication that things are getting worse. 

Reddit Stocks: SoFi Technologies (SOFI)

A further potential pause on student loans has SoFi Technologies moving lower. My colleague Shrey Dua recently wrote about the difficulty Morgan Stanley (NYSE:MS) is having in predicting the fintech’s direction. 

The large bank had to downgrade SOFI stock to “equal weight” from “overweight” as the moratorium on student loans may extend beyond May 1.

Morgan Stanley was bullish on SoFi earlier due to expectations that the Biden administration would lift the pause on payments. But that didn’t happen earlier this year. Many are now predicting that the pause may be extended beyond May 1, thus continuing to throttle a chunk of SoFi’s revenue streams. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yesterday saw the U.S. market debut of Zentek (NASDAQ:ZTEK), a company that investors should be watching. Zentek uplisted to the Nasdaq on March 22. Since its initial public offering (IPO), the Canadian tech company has been trading well. Previously, it was listed on the TSX Venture Exchange and traded over-the-counter. If growth continues for ZTEK stock, though, it will be among the top breakouts in the first half of 2022. So far, momentum is certainly on its side.

This week began with Zentek announcing that its U.S. Securities and Exchange Commission (SEC) Form 40-F registration would be effective by the close of the day. That meant a thumbs up for its common stock to begin trading on the Nasdaq. Today, ZTEK stock skyrocketed by more than 200% in premarket trading.

Growth has slowed a bit since then, but the stock is still moving steadily into the green. As of this writing, Zentek is up more than 25% for the morning.

What’s Happening with ZTEK Stock?

Zentek is an unusual company that specializes in “intellectual property development and commercialization.” Due to its penny stock status, it will stay under Wall Street’s radar until surpassing the $5 mark. If it keeps rising, however, that may happen before the end of the week. Currently, the company’s market capitalization is roughly $335 million. So, while it may be small-cap play, it’s no micro cap. That may reassure some investors. This week, CEO Greg Fenton stated:

“Trading on the NASDAQ is an important milestone for Zentek, and reflective of our growth and transition to becoming a global technology company. This will be pivotal in generating additional interest and awareness in the U.S. investment community, is expected to enhance trading liquidity in our shares, and will provide us with greater exposure to institutional investors.”

Of course, because ZTEK stock is new to U.S. markets, there’s still a lot of uncertainty with the company. Plenty of stocks shoot up on IPO momentum. But staying in the green after a major surge isn’t as easy.

Zentek’s nanotechnology used to improve patient health and safety could have significant applications for the healthcare industry. The penny stock’s current surge, though, is likely driven more by social media buzz than true investor confidence. Investors on Twitter (NYSE:TWTR) are excited by its winning streak and interest is only increasing thus far.

What It Means

As of now, it’s too early to classify ZTEK stock as a meme stock. Sure, it has the markings of a play for Reddit’s r/WallStreetBets crowd, but it could also catch Wall Street’s attention if it keeps rising. Regardless, investors should certainly be watching ZTEK stock as time demonstrates its true growth potential — or lack thereof.

ZTEK will likely stabilize soon, but it could also keep climbing. There are several possible outcomes. More attention from either mainstream or contrarian investors will push the stock up. Shares will likely only fall if both groups lose interest.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

While most of Wall Street focuses on large-cap and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult to get any decent share count leverage.

Many investors, especially more aggressive traders, look at lower-priced stocks as a way not only to make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half. For those leery of low-priced shares, just remember that Amazon and Apple at once time traded in the single digits.

Goldman Sachs is the premier investment bank in the world, so we screened its outstanding research database and found five stocks trading under the $10 level that could provide investors with upside potential ranging from over 100% to nearly 600%.

While all five are rated Buy at Goldman Sachs, they are much better suited for very aggressive investors. It also is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

AvePoint

This very off-the-radar company could be a big winner. AvePoint Inc. (NASDAQ: AVPT) provides Microsoft 365 data management solutions worldwide. It offers a suite of software as a service solutions to migrate, manage and protect data. The company provides cloud solutions for Office 365, Salesforce and Dynamics 365, as well as hybrid/on-premises products. It also offers advisory and implementation, maintenance and support, Microsoft Teams surge and advisory, migration as a service and quick-start services.

Last year, the company announced the completion of its previously announced business combination with Apex Technology Acquisition Corp., a publicly traded special purpose acquisition company (SPAC).

Goldman Sachs has a $15 price target on AvePoint stock. The consensus target is $13.20, and shares werelast seen trading on Friday at $5.41. The Goldman Sachs target represents a gain of well over 100%.

Compass

This stock has taken a beating over the past year and looks poised to rebound. Compass Inc. (NYSE: COMP) provides real estate brokerage services in the United States. The company specializes in high-margin, luxury homes in upscale markets, including New York, Philadelphia, Boston and San Francisco.

WallStreetBets continues to be a hot den of meme traders and we’re checking in on the top trending stocks in the Reddit community for Wednesday.

But before we get too far into this, remember that WSB stocks are often meme or penny stocks. Both of these are subject to volatility as they pull in retail and day traders looking to ride rallies higher before leaving with profits.

With that warning in mind, here are the top trending stocks on Reddit WallStreetBets today.

Top Stocks Trending on Reddit WallStreetBets

Investors looking for more stock market news are in luck!

We’ve got all the latest news traders need to know about for Wednesday! Among that is dividend stocks to watch, a big day coming for Marathon Digital (NASDAQ:MARA), as well as an Adobe (NASDAQ:ADBE) earnings update. You can find out more on these matters at the following links!

More Wednesday Stock Market News

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that  InvestorPlace.com’s writers disclose this fact and warn readers of the risks. 

Read More: Penny Stocks — How to Profit Without Getting Scammed

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Article printed from InvestorPlace Media, https://investorplace.com/2022/03/8-top-stocks-trending-on-reddit-wallstreetbets-today/.

©2022 InvestorPlace Media, LLC

It’s commonly overlooked

Markets are volatile. Inflation is high. Many of us are wondering where to put our money.

We’ve come a far way from a year ago when many of us were betting on different cryptocurrencies to go up or down in a matter of days.

Fast forward a year later and those same investors are still itching for more. Whether it’s more bitcoin to their name or putting more into the stock market, some investments are better than others.

There is one investment you can make right now that is considerably better than most others. It’s:

• Reliable
• Offers a huge ROI
• And is often overlooked by other markets.

So what is this master investment? You have to read the story to find out silly goose! Let me first tell you what it’s not.

Right now, real estate is still smoking hot. However, it’s a different kind of smoking hot than it was a year ago.

Houses are still being sold at an all-time high, but some buyers are starting to get cold feet.

Why?

Because inflation is barking at the heels of many people and that means mortgage rates are sky high.

I’m not making any predictions about the future, but I would hate to take a chance and buy real estate at the top of an all-time high bubble.

I wrote a story a while back about how luxury goods like watches are rapidly growing in value.

That doesn’t mean they are a great investment. Here today, gone tomorrow is something that can easily happen with luxury watches and similar goods.

If you buy an expensive watch, make sure you do it because you want that watch. Not because you want something that will hopefully retain its value. You’ll often find that watches and similar products don’t retain value as well as most of us think.

Unless you’re in your 60s or older, it’s typically best to not put too much money in bonds. Even with volatile markets, index funds will eventually bounce back if you have enough time to let them do their magic.

As for penny stocks, these should be off the table regardless. This isn’t Wolf of Wall Street. Don’t buy penny stocks in the hopes that they take off.

While we’re here, also don’t buy pump and cryptocurrencies that you think have potential because of r/wallstreetbets. It’s not a great investment right now, or ever really.

It’s you. The best investment you can make right now is in yourself.

• It might be a business you start.
• It might be a book or some kind of knowledge you’re pursuing.
• It might be some spiritual or self-help information you’re looking into.

Investing in yourself will always offer a considerable ROI in the long run because you’re betting on yourself. Not forces you can’t control.

This story was definitely a big build-up for a simple answer, but it’s a good one nonetheless. I apologize for nothing.