(UWMC), Gamestop Corporation (NYSE: GME) – Could UWM be the next target for Reddit traders?
UWM Holdings Corp (NYSE: UWMC) could be the next title to make a GameStop Corp (NYSE: GME) – rally type amid recent discussions on Reddit threads, according to a Detroit Free Press article.
What there is to know: Traders on the r / wallstreetbets subreddit are well known for targeting high short interest stocks. As of April 30, UWM held a short stake of 13.23%. Some Reddit traders recently named the stock as a potential candidate for short squeeze.
A short tightening occurs when a stock goes up sharply after traders who sold the stock short (bet it would fall) are forced to hedge their positions by buying back the stocks they borrowed to sell them, this which adds to the bullish momentum of the stock, thus “squeezing” it higher.
See also: UWM Holdings Stock Falls on Q1 Report, Share Buyback Announcement
Why this is important: “I wouldn’t short on our actions, to be honest with you,” UWM CEO Mat Ishbia told Detroit Free Press reporter JC Reindl. “Our business is really strong and continues to grow.
UWM is one of the largest wholesale mortgage lenders in the United States.
Price action: UWM has traded as high as $ 12.45 and as low as $ 6.25 since debuting on Wall Street on January 22.
At the last check on Wednesday, the stock was down 1.9% pre-market to $ 8.26.
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