BlackBerry (TSX: BB)(NYSE: BB) Inventories have increased by a record 171.5% since the beginning of the year. This is the best in 9 years. It increased by 40% just yesterday! However, this surge was not due to fundamentals. Instead, BlackBerry shares caught the attention of the most influential investors on the market in 2021. Reddit users..
Individual investors on social media platform Reddit, especially “Wall Street Bets” subreddit, have been targeting very unpopular stocks in recent months. The group purchasing of their particular stock has been a remarkable success. Some of their goals are Only for the last 3 weeks!
Congratulations if you own (or purchase with) BlackBerry shares. Twenty years later, the stock finally unleashed its shareholder value. But it may be time to take a step back and think about how far this rally can go and whether you should book a profit or buy more.
Here are the details.
BlackBerry stock price rating
At the time of this writing, BlackBerry shares are worth $ 24. This is a price-to-sales ratio of 13.4, much lower than most smartphone makers and tech stocks in 2021. However, unlike most tech companies, BlackBerry isn’t growing. Instead, it’s a shadow of the previous self, steadily shrinking over the last two decades.
Value investors like Premwaza bought shares in the hope that new management could save the company. The strategy was to offload BlackBerry’s patent portfolio and use its capital to double cybersecurity software and mobile operating systems for electric vehicles.
However, the portfolio is estimated to be worth only $ 571 million and the company’s market value is currently over $ 13 billion. Not surprisingly, BlackBerry’s stock price is overvalued. However, Reddit users didn’t target the basics of BlackBerry.
Investor sentiment trading
Reddit retail investors seem to have targeted BlackBerry Unpopular, Not because it was Underestimation.. They especially chose companies with short-term interest. In other words, they targeted institutional investors and the companies Wall Street was betting on.
When professional investors bet on stocks (called “shorts”), they borrow stocks and sell them at market prices. If the stock price falls over time, they can buy it back, deliver it to the buyer, and pocket the difference as a profit.
But when the stock price goes up, they have to buy the stock At a higher price To close their deal and stop their losses. This buying behavior pushes inventory even further — a phenomenon known as short squeeze.
WallStreetBets subreddit Reddit users have applied this short squeeze to very unpopular stocks to create these massive spikes. It was a useful strategy, but it can’t last forever. A short squeeze is, by definition, temporary. Therefore, knowledgeable investors need to make a profit now.
BlackBerry inventory is skyrocketing in response to requests from Reddit users. However, this short aperture is temporary. It may be a great opportunity to sell and book profits now.
Looking for another fast-growing stock? Here is the pick.
One of the lesser-known Canadian IPOs has doubled in value in a few months, and renowned Canadian stock picker Iain Butler sees potential billionaire makers awaiting. I’m …
He thinks this fast-growing company looks a lot like Shopify, so Iain officially recommended shares three years ago before it surged 1,211%!
Iain and his team have published a detailed report on this small TSX stock. Find out how to access NEXT Shopify today!
Stupid contributor Vishesh Raisinghani There are no positions in any of the listed stocks. The Motley Fool recommends BlackBerry and BlackBerry.
BlackBerry (TSX: BB) Stock: How high can Reddit push it?
https://www.fool.ca/2021/01/26/blackberry-tsxbb-stock-how-high-can-reddit-push-it/ BlackBerry (TSX: BB) Stock: How high can Reddit push it?