Rocket company stocks rose more than 70% on Tuesday, which was surprising as there was no obvious news about the online mortgage lender currently has big short bets from hedge funds and appears to be in the with day traders Reddit’s infamous WallStreetBets chat room

Almost 40% of the available stocks are sold short and high on the U listS. Companies on Hedge Funds Short Bet Size, according to FactSet, making it a classic target for meme-obsessed investors who have stormed sharply shortened companies into stocks and call options together this year in an attempt to crowd out short sellers Unclear at the time how much retail interest in Rocket was, Rocket shares closed 7119% on Tuesday at $ 4160 apiece, the best day since going public in August 2020 due to volatility, trading halted several times during the day. p>

A number of popular posts in the WallStreetBet chat room on Tuesday included Rocket Man saying, “I like RKT $ 17M All-In, let’s go to YOLO,” which quickly topped 1700 comments submitted

“We believe trading is reflecting retail / Reddit activity as we’ve seen other stocks recently,” Wells Fargo analyst Donald Fandetti wrote on Tuesday. “We take note of our increasingly positive view taken but not good enough to support this move which is the third trading day after the result. We expect stocks to normalize and start trading on fundamentals again, but the timing is uncertain “

Tuesday’s surge in Rocket Companies’ shares did not surprise trader Jon Najarian Najarian, a panelist on CNBC’s “Mid-Term Review” known for spotting unusual activity in the options market, said Tuesday his interest in Rocket Companies had been woken up the day before

“Our beta-tested social media content resumed some really bullish comments on the WallStreetBets Reddit board yesterday. These men and women are back and they are hugely connected to this,” said Najarian, co-founder from Market Rebellion, who has held call positions at Rocket Companies and contributed positions to GameStop

However, it remains to be seen if there is some sort of social reason that could keep Rocket stocks moving, meme-driven chatter on Rocket was nowhere near as intense as it was on GameStop, according to AI firm Accrete

“It’s 38% short When people see this, they think you can ruin the salespeople, “CNBC’s Jim Cramer told Squawk on the Street, while adding that he really likes the management and business fundamentals of Rocket Companies.” >

“I was a huge fan of [CEO] Jay Farner and [Chairman] Dan Gilbert and honestly didn’t understand why the stock didn’t respond to what was very good where it basically set out a story that just did said, “We can show that if interest rates go up, it hasn’t harmed our business. If interest rates go down, it won’t harm our business'”

Rocket’s surge could be a sign that the retail craze seen in GameStop earlier this year is still a factor. A month ago, an army of retail investors on Reddit managed to get the brick and mortar video game retailer down 1 in two weeksUp 500%, which caused great pain to short hedge funds The broader market also had some frenzy effects as many big investors took the risk across the board

If a stock with high short rates rises sharply, it could force short sellers to cover their declining positions to limit their losses. The short cover tends to continue to fuel the stock’s rally

Rocket reported stronger-than-expected fourth quarter earnings on Thursday, impressing some Wall Street analysts. Wells Fargo slightly raised its target price and raised its earnings estimate for Rocket after its big hit

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World News – US – Stocks of rocket companies, big short hedge fund target, rise more than 70%