Skip to main content
Welcome to
super saver spring
offer ends april 20
save over $140
save over 85%
$0.99
per week for 24 weeks
Welcome to
super saver spring
$0.99
per week
for 24 weeks
// //

Shares in heavily-shorted mortgage provider Rocket Companies surged on Tuesday and were set for their third straight day of gains as the stock drew interest on Twitter and Reddit’s popular WallStreetBets.

After being halted for volatility the stock was last up 46.2% at $35.54, after earlier rising as much as 73.5%. It extended earlier gains as volume spiked higher in the afternoon with the more than 212 million trades far exceeding the number of publicly traded shares. And at its session high so far, the stock was more than 110% above Thursday’s closing price.

Some fuel for the company’s recent gains may be coming from a short squeeze, where investors betting against a companies shares are forced to unwind their positions after a rally in the stock price, analysts said.

Story continues below advertisement

That would make it similar to GameStop and other popular “meme stocks” that soared in January and plummeted last month, only to come alive again in recent weeks.

“This is another ‘Gamestopesque’ short activity,” said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

As of Monday’s close, $1.2 billion worth of the company’s shares outstanding were sold short, compared with $937 million a week ago, according to Dusaniwsky. The percentage of shares outstanding sold short stood at 45.8% as of Monday’s close, from 35.5% at the beginning of February, he said.

The rate charged to borrow shares of Rocket Companies has also sky rocketed as demand to short the stock rose, with investors taking new short positions being charged 75% to 100% of shares borrowed on Tuesday compared with a 29% borrow fee for existing short sellers, Dusaniwsky said.

Jefferies analyst Ryan Carr on Feb 25 raised his price target on the stock to $30, from $27.50, after the company reported fourth-quarter results that handily beat Wall Street expectations.

Rocket also announced a special dividend of $1.11/shr payable on March 23 to shareholders of record at close of business on March 9.

Rocket’s Chief Executive Officer Jay Farner is due to participate in Morgan Stanley’s Technology, Media & Telecom conference on Wednesday morning.

Story continues below advertisement

Meanwhile shares in another mortgage company, UWM Holdings , were up 19% at $9.09 with trading volume already approaching three times the 10-day moving average.

Mentions of Rocket Companies on WallstreetBets have climbed in recent days, according to website SwaggyStocks.com, which tracks comments on the forum.

Other stocks followed closely by retail investors were seeing a mixed reception on Tuesday, with shares of GameStop up 2.0% while headphone maker Koss Corp was down 8.7% and AMC Entertainment was off 4.5%.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies