U.S. markets closed mixed on Tuesday, but without much conviction in either direction. The situation in China related to a potential default of Evergrande apparently has been avoided but no details are available. The Federal Reserve’s FOMC meeting wraps up Wednesday, and analysts will be listening closely to Chair Jerome Powell’s statement for signs of when the central bank may begin to reduce its bond-buying.
Among the meme stocks, there were a couple of double-digit winners on Tuesday. Electric vehicle maker Lucid Group Inc. (NASDAQ: LCID) traded up about 9% at noon and closed the day with a gain of 11.4%. The stock was the most discussed on social media over the past 24 hours. A popular post included a 12-month price target increase from $10 to $35 at CFRA. The analyst cited Lucid’s EPA-rated range of 520 miles on a single battery charge for the company’s Air Dream Edition ($169,000 before the federal tax credit of $7,500). First deliveries are expected to begin by the end of the year, but no firm date has been announced. The stock traded up more than 3% in Wednesday’s premarket session.
Aterian Inc. (NASDAQ: ATER) traded up by more than 13% in the noon hour Tuesday and closed up nearly 11%. The stock traded up about 10% in Wednesday’s premarket session. This looks exactly like a short squeeze. Trading volume on Tuesday reached more than 59 million shares, more than three times the daily average, and the share price has nearly quadrupled in the past month. About 20% of the float of 21.2 million shares was shorted as of August 31.
DraftKings Inc. (NASDAQ: DKNG) reportedly has offered to pay $20 billion in cash and stock to acquire London-based Entain, which had earlier this year declined an $11 billion takeover bid from MGM Resorts. DraftKings stock closed down 7.4% on Tuesday and traded up by less than 1% in Wednesday’s premarket. A major impediment to the acquisition is MGM’s joint venture with Entain on BetMGM, a digital gambling site. MGM has made it pretty clear that it will exercise its right to block any acquisition.
IronNet Inc. (NASDAQ: IRNT) closed down by about 7.1% on Tuesday and traded down another 1.6% in Wednesday’s premarket. The cybersecurity provider’s share price has doubled in the past month. The stock has dropped out of the ranks of the most talked-about on social media, and it currently trades more than $16 below its 52-week high of $47.50 set on September 16, just three trading sessions ago.
Of these four stocks, only Lucid is among the 10 most active in Wednesday’s premarket. Marin Software Inc. (NASDAQ: MRIN), which signed a revenue-sharing agreement with Google on Tuesday, traded up by more than 80% Wednesday morning on volume of more than 4 million shares. The company’s stock trades a daily average of more than 27 million shares but only 9.4 million changed hands Tuesday. That number will go way up Wednesday. About 9.5% of Marin Software’s shares are sold short.