BioTech

'Meme stock' rally pauses, Redditors focus on biotech stocks

Credit: REUTERS/DADO RUVIC

June 14 (Reuters) - Small-time stock traders turned their attention to the biotech and healthcare sectors on Monday, lifting shares of some by as much as 10%, while the rally in stocks that were favored in recent weeks appeared to fade.

Of the top 10 stocks trending on trading-focused social media site Stocktwits, vaccine developers Novavax Inc NVAX.O and Vaxart Inc VXRT.O were in the third and fourth spots, respectively, with message volume on Vaxart up 9.7% and nearly 97% of them reflecting a positive sentiment.

Shares of Novavax jumped 10.3% in premarket trading as the company also reported late-stage data from a U.S.-based clinical trial showing its vaccine was more than 90% effective against COVID-19 across a variety of variants of the virus.

Individual traders on forums such Reddit's WallStreetBets have acted in concert this year to bid up shares of heavily shorted stocks, triggering a phenomenon known as a "short squeeze", which pushes up stock prices even more.

Video game retailer GameStop Corp GME.N and cinema operator AMC Entertainment AMC.N, which were at the center of the so-called "meme stock" rally this year, have seen their share price soar more than 1,100% since the end of December.

AMC shares were up 3.5% in early deals after jumping more than 300% in the past three weeks. GameStop shares rose 1.1%, while Vaxart was up 1.6%.

Shares of gaming equipment maker Corsair Gaming Inc CRSR.O jumped 12.5%. The company - which has a short interest of 18.25% of free float, according to Refinitiv data - was the top trending stock on Stocktwits, with a 26.9% jump in message volume.

(Reporting by Sagarika Jaisinghani and Aaron Saldanha in Bengaluru; Editing by Shinjini Ganguli)

((Sagarika.Jaisinghani@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2256;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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