Sometimes, in investing, sudden gains and declines happen without much of anything to connect to them. A stock is suddenly just popular, or not because it is. That seems to be what happened to Grom Social Enterprises (NASDAQ:GROM). It’s a social media stock that surged for the second day in a row despite very little news.
A short squeeze started up for Grom Social, based on data from Fintel, which revealed that shares available to short plunged from 80,000 to zero in the space of a few hours. That’s the kind of behavior that looks a lot like a new meme stock already in progress, some note. However, further investigation revealed that the retail investor market wasn’t really in on the action at all. Mentions of Grom Social on either Reddit or Stocktwits have been subdued at best, reports note.
A recent letter from the company, issued two weeks ago, doesn’t offer a lot of insight either. Grom revealed that it considers itself “…the only fully Children’s Online Privacy Protection Act-compliant social media application in the marketplace.” However, reports suggest that its earlier-released “Santa.com” website produced about 11,000 visits per day. Thus, the app’s COPPA status alone doesn’t seem to produce that much value. Other developments of late included a new classroom management tool developed with Radix.
Despite the relative lack of news, and only one analyst offering visibility, the last five days show huge potential interest. GROM stock hovered in the $1-$2 range ahead of the first leg up and then saw a second leg up just one day later.
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