Company Participates in General Boost of Meme Stocks
BlackBerry shares are on the steep rise once again. At the beginning of 2021, they suddenly jumped, increasing fourfold and hitting a 10-year high. Analysts conclude that BlackBerry was pushed up by retail investors in the Wall Street Bets group on Reddit. The same group orchestrated the sharp rallies in shares of the video game retailer GameStop and AMC Entertainment Holdings, the movie theatre operator.
Back in January, BlackBerry was not tenacious enough to hold onto its gains and slipped from the record high at $25.10. Now, the company is experiencing a spectacular comeback. This week on Tuesday, BlackBerry soared 15% to trade at $11.56, thereby hitting the highest level in more than two months. It continued its winning streak and added another 32% on Wednesday. Other so-called meme stocks took part in the overall increase: AMC shares grew by 23% on Tuesday and almost doubled on Wednesday. GameStop advanced 12% and 13% on Tuesday and Wednesday respectively.
Analysts agree that this time, too, BlackBerry’s ascend is caused by investors trying to spur a short squeeze. On May 14, about 50.2 million BlackBerry shares were sold short. This was about 9% of the company’s shares outstanding and equal to four days of average trading volume in the stock over the past three months.
Analysts expect BlackBerry to unveil revenue of $824 million for the January 2022 fiscal year. This figure is 10% down from the $919 million reported in 2021. The company is predicted to lose around five cents a share. Presently, BlackBerry has a market cap of about $6.5 billion.