Koss Stock Is Amplified in Pre-Market Trading — Is It a Good Buy?


Jan. 26 2021, Updated 9:46 a.m. ET

Headphone designer, manufacturer, and retailer Koss Corporation has been wooing consumers with its innovative gear since 1953. On Jan. 26, the company got a boost from some users on the Wall Street Bets subreddit, which sent the stock higher.

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"KOSS" on the Nasdaq Exchange grew as much as 153.5 percent in pre-market trading hours on Jan. 26. The peak came by 4:20 p.m. ET on Jan. 25 shortly after the market close. However, Koss stock managed to maintain its momentum until the morning due to ongoing chit-chat from market influencers

Koss is a reliable brand that has been around for decades.

In the 1950s, John C. Koss of Milwaukee founded Koss. He invented the first high-fidelity headphones and the first SP/3 stereophone. People trust the company to deliver adequate and innovative listening solutions. 

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Despite the popularity, Koss struggled in 2020, although that presumably has a lot to do with the economic and social effects of the COVID-19 pandemic. In August, the company reported that its fiscal year sales were down 16.2 percent to $18,311,830 from $21,842,097 in the same period last year. Also, the net loss hit $465,597, which is on the other side of the spectrum from a net income of $305,989 the previous year. 

What to expect from Koss stock

Will Meade is a former hedge fund manager who's considered to be rather influential on the Internet. In the late afternoon on Jan. 25, Meade posted about three stocks — AMC Entertainment Holdings, Clovis Oncology, and Koss. He captioned the post, "What short names will the Reddit Wall Street Bets army go after next?" 

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It seems that the "Wall Street Bets army" (as Meade put it) decided to go after Koss. The momentum probably won't last long, particularly since the surge rests on a simple tweet. In my experience, these rallies tend to be short lived. 

Stocktwits is talking up Koss as well

Some investors are paying close attention to Koss stock in the hopes that they can capitalize on the dips in valuation. This could very well work, but keep in mind that the risk is heightened. Your risk tolerance will dictate your decision. 

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Meade also mentioned AMC stock in his tweet. It seems like the influence is taking shape beyond just Koss.

Should investors buy Koss stock?

As lucrative as a quick surge can be, you may be too late to the party. The overnight influx for Koss could potentially grow even more. I'm sure there are plenty of options calls on it right now. However, I also know that there are plenty of puts on the same stock. I think that the shares will, indeed, flutter a bit lower. 

In short, if you aren't in by market open on the nose, I would focus your morning trades elsewhere.


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