Meme Share Revival Drives Volume Surge in Handful of Tiny Stocks

While technology giants roared back in Tuesday’s big Nasdaq bounce, the euphoric sentiment was hardly confined to megacaps. Around the market, volume was erupting in tiny software and health-care companies that tempted retail day traders during the pandemic.

More shares of Sundial Growers Inc. traded on the Nasdaq than those of tech bellwether Apple Inc., and Second Sight Medical Products Inc. wasn’t far behind.

The pair were among the most-traded shares, just behind volume leader Exela Technologies Inc., a software services company that saw nearly 450 million shares trade hands intraday after a small contract win.

The new crop of young daytraders that emerged during the pandemic is looking for new opportunities, especially in some typically thinly traded biotech and medical-device stocks. A fresh round of stimulus checks may prove to only heighten the volatility.

“There a lot of millennial traders that are firmly locked in, though not as active as they were at the beginning of the craze” in the search for fresh returns, said Edward Moya, a senior market analyst at Oanda.

Meme Share Revival Drives Volume Surge in Handful of Tiny Stocks

Volume in Second Sight exceeded 105 million in a third day of trading since the company got regulatory approval in the U.S. for its redesigned eye prosthesis hardware. Sundial, a cannabis company, had volume of nearly 307 million shares. About 128 million shares of Apple traded.

OpGen Inc. climbed as much as 37% before paring gains on volume of about 75 million shares after a new publication on its test for bacterial infections in Covid-19 patients on Monday. OpGen and Second Sight were among the most mentioned names on StockTwits behind other retail favorites, GameStop Corp. and AMC Entertainment Holdings Inc.

“It’s not necessarily to do with long-term fundamentals,” Moya said by phone. “These are more get-rich-quick type trades.”

Financial watchdogs are looking into the retail trading mania. The Securities and Exchange Commission and Financial Industry Regulatory Authority are considering new rules.

Moya expects regulation may be down the road “but that’s far from now,” he said.

©2021 Bloomberg L.P.

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