When talking about rockets you may first think about astronauts, space, or maybe Elon Musk. But today, the rocket is ringing a different bell, namely, the stock market. So, what do rockets, and the stock market have in common? Well for one, they like to go up, but more specifically and less known, there is a stock called Rocket Companies. Rocket companies rocketed up today, out of the blue, with no logical explanation whatsoever. But since when was logic important to markets anyway. The companies rise is due to none other than the infamous WallStreetBets group on Reddit, a community of investors powered by memes, and vengeance for Wall Street. Rocket Companies is a company that has nothing to do with rockets, rather, they are a Detroit-based holding company consisting of personal finance and consumer technology brands including Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, and more.
So why the rise? Well just like GameStop if you recall from about a month ago, the rise was fueled by the reaction to Wallstreet shorting the stock. In fact, according to FactSet, nearly 40% of Rocket company’s available shares are sold short placing it near the top of the list of U.S. companies in terms of size of the short bet by Hedge Funds. With such staggering numbers, there is no doubt that WallStreetBets was bound to send it flying in hopes to make a buck while causing hedge funds to lose. By loading up on-call options and long positions like it’s Costco and everything’s on sale, WallStreetBets have a track record for squeezing out short-sellers. Some have pointed out that the rise of Rocket Companies is much smaller than GameStop’s. But those on WallStreetBets remain intent on sending it higher, at least for now that is.
What do you think of Rocket Companies rocketing rise? And will you be investing?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.