Rocket Could Be Next GameStop As Redditers Soar Lender Shares

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It looks like Rocket Companies Inc. will be the next preferred stock for day traders on Reddit who have pushed up the cost of GameStop Corp. shares. last month.

Shares of the parent company of billionaire Dan Gilbert’s mortgage lender, Rocket Mortgage, closed 71% higher on Tuesday afternoon. Like beleaguered video game retailer GameStop, Rocket is among the more short-lived stocks with investors betting the stock price will fall – a boon for bullish retail investors on the WallStreetBets forum.

Rocket is the ninth best-selling stock short, according to MarketWatch, with nearly 40% of its available stocks sold short mostly through hedge funds. This makes them a target for investors who have cooperated together this year, buying “meme” stocks of heavily shorted companies to oust short sellers.

Tuesday’s trading positioned Rocket to have its best day since its IPO in August. Its IPO was $ 18 and the stock closed at $ 41.60 Tuesday afternoon – up $ 17.30 a share that day.

Rocket posted a record $ 9.4 billion profit last week amid a housing and refinancing boom. The company also announced a dividend of $ 1.11 per share for later this month. However, investors with a short position must pay the dividend to the company instead of receiving it, according to federal rules. This may encourage them to evacuate.

Rocket’s surge mirrors the GameStop rally last month when retail investors at Reddit pushed shares of the Texas-based retailer up 1,500% in two weeks.

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Twitter: @BreanaCNoble

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