Short Squeeze Again
By Thu, Feb 11, 2021
Hey Scoopers,
Chairman Powell gave the market some peace of mind. — More on that in the “Overall Market” section.
Beyond the overall market, another short squeeze rally sent a cannabis stock to the roof, while one well-performing tech stock spooked investors over more R&D expenses. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, what’s the risk of being a corporate Bitcoin investor? — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: The stock market indices didn’t agree on the direction once again. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price came down after Tesla’s Bitcoin purchase hype subsided.
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Peace of Mind
After a quick dip in the early trading hours, all three indices had a relatively calm day and, just like the day before, ended Wednesday around the same place they had started.
The market stayed calm thanks to Chairman Powell’s confirmation that the Fed would not change the interest rate until the unemployment challenges are resolved.
Short Squeeze Again
So, what happened?
Shares of Tilray (Ticker: TLRY) were up more than 73%. It seems the short squeeze Redditors are moving from GameStop to Tilray. Several other heavily-shorted cannabis stocks followed suit.
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Disappointed Over R&D
So what happened?
Shares of Alteryx (Ticker: AYX) were down more than 15% after the company announced its latest quarterly earnings report. The analytics platform had a 19% growth in topline revenue for the year and a 32% increase in annual recurring revenue.
Investors got spooked because the company also announced a lower than expected outlook for the next quarter and discussed higher expenses. The company is going through an operational transformation of its sales organization and plans to invest in product development to accelerate innovation.
Risk of Investing in Bitcoin
So what happened?
There is a rise in the number of corporations investing a part of their cash in Bitcoin. Tesla (Ticker: TSLA) is the latest one, but before Tesla, there was MicroStrategy (Ticker: MSTR). While it’s exciting to invest in Bitcoin, and corporations can make quite a lot of money, there are also risks. The biggest of which is when your company loses a significant amount of its market cap in a few hours.
That’s what happened to MicroStrategy yesterday. The company lost 23% of its value. More than ⅓ of its value is now its Bitcoin holding. So, when Bitcoin price drops, MicrosStrategy’s market cap would follow.
If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. We look forward to hearing from you.
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
