Retailer Express More Than Doubles Amid Reddit Speculation
(Bloomberg) -- Apparel retailer Express Inc. skyrocketed, extending its meteoric rally with record volume as retail investors touted the company across various social media platforms including Reddit message boards.
Shares of Columbus, Ohio-based Express rallied 132% Monday after gaining for a third week. The stock had advanced 97% this year through Friday. More than 350 million shares traded hands Monday, a fresh record after Friday’s all-time high of about 77 million shares. The volume today is about 38 times the amount that changes hands on an average day for Walmart Inc.
Express has been the subject of Reddit boards where users speculated whether it could be the next GameStop, the video-game retailer that surged again today. GameStop, together with other heavily shorted stocks like Bed Bath & Beyond Inc. and AMC Entertainment Holdings Inc., jumped last week as they continued to gain popularity among retail investors.
“We are more cautious on share price and valuation now as the stampede on Express shares seems to discount the company hemorrhaging cash,” said Jennifer Redding, an analyst at Wedbush. “They are burning upwards of $134.5 million in nine months as the pandemic drives demand for more casual work-at-home apparel, hitting gross margin and comp at the traditionally dressier apparel retailer particularly hard,” she said.
Express short interest stands at about 14% of the free float, according to data from S3 Partners. Other heavily shorted retailers like Dillard’s Inc., Macy’s Inc. and Chico’s FAS Inc. also jumped Monday.
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