Top 7 Stocks on Reddit in March 2021

If you are one who prides themselves in staying stock market savvy, then you are well aware of late January’s GameStop stock insanity. How did a struggling video game retailer suddenly move to the forefront of stock traders’ minds? 

The answer, though simple, may surprise you: Reddit. The WallStreetBets stocks discussion group spends their days sharing ideas for what to invest in next, and though these conversations alone are not what pushed the GameStop stock up so much, they no doubt played a crucial role. 

Bearing that in mind, it would behoove any serious investor to pay attention to what users on online sites, like Reddit and Twitter, are interested in buying and selling. Here is a breakdown of the top seven stocks mentioned on Reddit, according to data collected by Cutt on March 11 of this year. 

Top 7 Stocks on Reddit by Mention

GME (GameStop Corp): 

Given the uproar buying, trading, and selling stocks of this company caused, it should come as no surprise to you to see the GameStop stock topping our list. The day this data was collected, it garnered a whopping 31,366 total mentions, pulling in an average of 1,828 per hour. 

AMC – AMC Entertainment

Next up is entertainment giant AMC. You likely know this company by their theatres that span across the United States and reputation for innovation. The AMC stock ranks number two for most mentioned Reddit stocks, with 14,731 mentions on data collection day and an average of 860 mentions in an hour. 

RBLX – Roblox Corp

Number three is gaming site Roblox. The platform is loved by adults and children alike, and with 7,779 total mentions on March 11 and an average of 455 per hour, stock traders and investors will love it, too. 

BTC – Bitcoin

Bitcoin first burst onto the scene in 2009 as a form of digital currency, or cryptocurrency. Stocks in this company are said to be good for both long and short-term investments, pulling in 5,624 Reddit mentions when the data was collected and averaging 421 mentions every hour. 

TSLA – Tesla, Inc. 

The well-known Tesla Incorporation was founded in 2003 and since then has played a major role in the push to develop sustainable energy through electric cars and solar and renewable energy sources for businesses and homes. Tesla’s stock was mentioned by Reddit users 4,488 times on March 11 with an average of 252 mentions per hour. 

SPY – SPDR S&P 500

In case you’re new to the world of stocks and unfamiliar with this particular string of letters and numbers, SPDR S&P 500 measures the performance of 500 large companies’ stocks in the United States. Ranking number six on the list of top trending Reddit stocks, SPY had a recorded 2,616 mentions on the day of data collection and averaged 135 mentions per hour. 

PLTR – Palantir

Last but certainly not least in the top seven is PLTR, a stock in Palantir, a software company that integrates a business or organization’s data and operations into one convenient platform. On March 11, PLTR was mentioned 1,434 times and averaged 96 mentions per hour. 

Case Study: $RKT: 71% Jump in One Day

Overview

The Cutt’s proprietary alert system identified $RKT as a trending stock on social media on the evening of March 1. By the close of trading on March 2, $RKT had risen 70%. This study is a summary of the events that led to The Cutt members being able to profit off the trade alert.

Reddit’s wallstreetbets now famous (infamous?) GME trade has brought a lot of attention to the idea of trading stocks based on social media post trends.

Since then, several other stocks have joined the wsb short squeeze party, including AMC. On March 1, $RKT (Rocket Mortgage) became a target on wallstreetbets.

The Alert

On March 1 at 8:57PM, The Cutt’s automated alert system sent out an alert to our members. RKT was hot and trending on wallstreetbets. It was after market hours, but RKT had closed at $24.30 that day. By the close of March 2, RKT would rocket up 71% to close at $41.60.

The DD

The alert was based on activity generated by u/tendeeznuts DD (due diligence) post on RKT: $RKT – CEO Forcing Shorts to Pay for Their Own Squeeze by 3/9.

u/Tendeeznuts highlights in the post RKT’s strategy for dealing with short sellers: forcing them to pay out a $1.11 dividend on 3/9 to the people they have borrowed shares from. The author also points out how the CEO/Founder actually owns most of the outstanding stock leaving the shorts naked (not enough share float to cover the short positions). 

Who Cares?

The DD stood up to scrutiny and u/tendeeznuts has a strong wallstreetbets pedigree. In just one year on the sub-reddit, the user has generated 6900 points of post karma and 14,000 of comment karma. In addition, the user is a well awarded poster! 

The Outcome

This graph plots price (orange) against mentions (blue). Here is the Yahoo finance detail of the price movement. The long flat orange line is the price overnight (which doesn’t change outside of market hours). You can see the blue mentions peek in the late evening on 3/1 and in the early morning of 3/2. At the open on 3/2, the price jumps from $24 to $29 right away and then slowly drifts upward to the $41 close. The blue dots reflect the mentions also peaking as the day goes on.

Total Mentions

Here is a summary of the total mentions of RKT on major wallstreetbets investing sub-reddits and on Twitter over the seven days including the event. RKT goes from just a few hundred mentions a day to over 20,000 and then settles down to a level still 5-10x higher than the prior average. This is a typical trend pattern for these ‘trending’ driven stocks.

DateMentions
2021-03-051289
2021-03-043524
2021-03-0316347
2021-03-0220089
2021-03-012450
2021-02-28383
2021-02-27292

Conclusion

The era of social media moving stocks has been here for a long time. The trick for a savvy trend follower is to identify the trend before the price has moved too much. The Cutt has been working to solve this problem for some time. Our alert a day ahead of the price movement is just another example of how we are able to sift out the real trends from the noise on social media.