There is a method for the madness on WallStreetBets. For every stock that rises like GameStop Corp. and AMC Entertainment Holdings Inc., are not launching many more names featured on the Reddit website.
An analysis by Wall Street Journal of millions of posts on WallStreetBets, the performance of the most named companies each month, and interviews with traders show that a stock is rising.
Shares with the highest chance of success usually have low stock prices, usually less than $ 25 per share, and are traded. Low stock prices allow smaller traders to gather interest more easily and can sometimes indicate cheap valuations. Stock prices of lightly traded stocks can be more easily pushed higher or lower than stocks in stocks that are traded more frequently.
According to Hudson Cashdan, co-founder of TopStonks.com, large companies with high share prices and volume, such as the third company last year, Apple Inc., are unpleasant about the events on the message board. website that tracks stocks mentioned on Reddit.
The success stories often share common characteristics with stocks chosen by pros. The companies seem to be undervalued by some measures and have short-term catalysts to improve their business or at least arouse excitement.