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Investors Are Now Paying Even Closer Attention to Reddit Stock Discussions

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Mar. 10 2021, Published 9:53 a.m. ET

Social media discussions can move markets, a sReddit proved in the GameStop frenzy. Days before GameStop (GME) took off in an epic short squeeze that took Wall Street elites by surprise, it became a hot topic on Reddit. As a result, investors are now paying even closer attention to the most mentioned stocks on Reddit.

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The impact of social media on the stock market has become so significant that there's even a fund that bases its investment decisions on social media conversations. The BUZZ ETF invests in stocks that are trending on social platforms. 

The 5 most mentioned stocks on Reddit

The stock discussions on Reddit keep rolling. These are some of the most talked-about stocks: 

  • GameStop (GME). The videogame retailer has seen its stock gain more than 1,200 percent year-to-date. The company's board recently formed a special team to work on turning around the business. Analysts' average price target for GME is $16.80. 
  • AMC Theatres (AMC). The stock is up 395 percent year-to-date but is still at a 48 percent discount to its recent high. Analysts' average price target for AMC is $3.83, with a high forecast of $5.50 and a low of $1.
  • Palantir (PLTR). The analytics software provider's stock is up 3 percent year-to-date and 46 percent below its recent peak. Analysts' average price target for PLTR is $26, with a high estimate of $40 and a low of $15. 
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  • Marriott (MAR). The hotel chain's stock is up 11 percent year-to-date and 8 percent below its recent high. Analysts' average price target for MAR is $138, with a high of $168 and a low of $116.
  • Tesla (TSLA). After gaining 700 percent in 2020, TSLA is down 5 percent year-to-date and 25 percent below its peak. Analysts' average price target for TSLA is $636. Their highest estimate is $1,200, and their lowest is $67. 
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Why should investors monitor Reddit stock discussions?

Investors made good money in the GameStop short squeeze, and now many are tracking stock conversations on Reddit to make even more. Stocks with plenty of positive mentions may be on their way up, while stocks more negative comments may be on their way down. 

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Some investors are also using Reddit stock discussions to generate ideas for long-term investing and learn more about new stocks. This has become especially important with so many companies going public amid SPAC mania.

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Characteristics of Reddit stocks set to take off

Dozens of stocks are discussed on the r/wallstreetbets and r/stocks Reddit communities. While some take off, others don’t. However, Reddit stocks that eventually take off seem to share some characteristics. Many of them have low prices, usually under $20. These low prices make them accessible to more investors.

Heavily shorted stocks have also taken off after their mention on Reddit increases. When investors start buying shorted stock, its price can rise quickly as short-sellers rush to close their positions to minimize losses.

How to know the most mentioned stocks on Reddit

There are several tools investors can use to track the most popular Reddit stocks. Some of these include Thinknum, an "alternative data" tracker, and TopStonks.com, which offers a product that helps investors better understand market conversations. 

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