With old-school meme stocks like GameStop (NASDAQ: GME) and AMC (NYSE: AMC) barely showing much in the way of stock volatility, social media traders have been eagerly hunting for the next hot pick. Over the past few months, we’ve seen dozens of stocks surge over a day or two as trader communities like WallStreetBets look for the next hot meme stock. On Thursday, social media traders targeted a company called Offerpad, driving up its stock price significantly, despite the lack of major catalysts.
Offerpad is an online retail platform that provides online home-selling and other related info services to customers looking to buy real estate. The company first went public earlier this year through a SPAC rather than a traditional IPO and is currently available across over 1,000 cities and towns in America. Since going public, the stock has remained relatively obscure until today’s sudden price jump.
There’s not really much news that would justify the massive price swing we saw on Thursday. Among other news, Offerpad announced in a regulatory filing that it had acquired a loan of more than $300 million to help itself grow over the next couple of years. The bank in question is with JPMorgan Chase. That’s definitely good news since Offerpad also operates in the business of house flipping, which is a capital-intensive model. However, it wasn’t really that public of a news announcement, as traders had to look through the less-publicized regulatory filings to find this info.
Regardless, the direct implications of this announcement are secondary in comparison to the newfound attention Offerpad is getting from social media traders. Forums like WallStreetBets are jumping on Offerpad right now, just like they have with so many other potential meme stocks over the past weeks. Although this fundraising catalyst is probably why Offerpad popped up on these trader’s radars, in truth, it doesn’t really matter how much the company raised. All that matters is that traders think it will make enough money in the short term. That’s the nature of today’s trading environment.
Shares of Offerpad Solutions shot up more than 59.5% over the course of the day. Before this point, however, most investors didn’t really care about the company that much. So far this year, shares are up 81.4%, but most of those gains are from today.
We’re already seeing prices drop by 8.4% in pre-market trading, so don’t expect those Thursday gains to last much longer. From what we’ve seen so far from these meme stock candidates, they tend to pop for a day or two before traders give up and lock in their gains.
Offerpad Company Profile
Offerpad Solutions Inc provides a way to buy and sell a home. It uses technology-enabled solutions to remake the home selling and buying experience by offering customers the convenience, control, and certainty to solve their housing needs. It combines fundamental real estate expertise with the data-driven digital Solutions Center platform to give users a holistic, customer-centric experience, enabling them to efficiently sell and buy their homes online with streamlined access to other services including mortgage, listing, and buyer representation services. – Warrior Trading News