- Meme stocks Support.com and Vinco Ventures may see short squeezes, but they won't send the stock prices flying to the moon, GameStop-style.
- That's according to one market expert who noted that the amount of shares shorted in each stock is relatively small in contrast to the average trading volumes of the stocks.
- His analysis comes as day traders continue to bet on meme stocks Vinco Ventures and Support.com.
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Day traders seeking to find the next big short squeeze akin to GameStop's 700% rally may be disappointed by the latest meme stocks, according to one market expert.
In a Tuesday client note, S3 Partner's Ihor Dusaniwsky said that although a short squeeze could occur in retail favorites Support.com and Vinco Ventures, the resulting activity will be unlikely to move their stock prices significantly higher.
Dusaniwsky, the firm's managing director of predictive analytics, explained that the number of shares shorted in each stock is relatively small in contrast to the average trading volumes of the stocks. According to S3 data, about 10.37 million shares of Vinco Ventures stock are sold short, with 6.02 million shares in play against Support.com.
"If a short squeeze does occur, the effect of the buy-to-covers may have a minimal effect on their stock price," said Dusaniwsky.
He also tweeted on Wednesday that the effect of the squeeze will be like adding a "gallon of water to a pool."
"Yes the height of the water of the pool changed, but only slightly. The long side will be the main price driver," Dusaniwsky said.
His analysis comes as day traders on social media sites like Stocktwits continue to pray for a short squeeze that will send their stocks "to the moon."
In the Vinco Ventures (ticker: BBIG) chat, retail investors encouraged each other to not sell their shares and continue buying on Wednesday. The stock is currently trading around 20% higher than Tuesday's close.
"$BBIG what does this price action tell you folks??! Wake up!! We are going higher! They can't get it down no more where they want it. Only putting more pressure on their short position," one user wrote.
In the Support.com chat, sentiment has fallen as the stock spends its second day in the red after snapping a nine-day winning streak on Tuesday. Stocktwits' sentiment tracker indicated there were more bearish than bullish posts in the chat on Wednesday.
Shares of Support.com and Vinco Ventures have gained 225% and 184%, respectively, over the the last month.