10 Reddit Stocks the Smart Money is Buying | Summary and Q&A

TL;DR

Before 2020, retail investors were considered the "dumb money," but their collective power has grown, allowing them to move markets and squeeze short sellers out of stocks. This analysis looks at popular Reddit stocks, such as Canoe Inc, GameStop, Blackberry, Bed Bath and Beyond, Nokia, Lucid Group, AMC Entertainment, Sofi Technologies, Palantir, and Rivian Automotive.

Key Insights

• 🥹 Retail investors now hold significant power in the stock market, allowing them to move markets and disrupt short sellers.
• 😑 Canoe Inc, despite being a penny stock, has the potential for high returns with its pre-revenue electric vehicle business and significant orders.
• 🖤 GameStop has managed to survive with its cash, but its lack of a clear strategy for a turnaround has deterred both institutional and retail investors.
• 😀 Blackberry's transformation into an IoT and cybersecurity company faces challenges in meeting growth goals and delivering profitability.
• 🖤 Bed Bath and Beyond struggles with significant debt and a lack of a clear plan for a successful turnaround.
• 🙃 Nokia is profitable and less risky compared to other Reddit stocks but has limited upside potential.
• 😀 Lucid Group faces challenges with order cancellations, cash burn, and the need for shareholder dilution to become cash flow positive.
• 👨‍💼 AMC Entertainment has massive debt and without a long-term plan for profitability, it remains an unsustainable business.
• 😀 Sofi Technologies offers a range of financial services and has strong growth potential in digital banking, although it faces risks from student loan forbearance.
• ✋ Palantir, with its government trust and commercial prospects, needs to address its high valuation to be considered a compelling investment.

Transcript

before 2020 regular investors were mocked by Wall Street as the dumb money while hedge funds and institutional money managers with their armies of analysts were the smart money and while retail investors can never match the amount of research done by those institutionals the sheer size of the group gives it another Power a power to move markets ind... Read More

Questions & Answers

Q: How have retail investors gained more power in the stock market?

Before 2020, retail investors were considered less influential, but their collective size has allowed them to move markets and squeeze short sellers. Retail investors now hold 25% of stock trading.

Q: Why is Canoe Inc considered a potential investment?

Canoe Inc is a pre-revenue electric vehicle company with significant orders and the potential for high returns. Despite being a penny stock, it could offer a 10x or higher return if it captures a fraction of the market.

Q: What challenges does GameStop face?

GameStop has cash to survive, but its management lacks a clear plan for a turnaround. It has successfully issued shares to raise cash, but it needs a viable strategy to replace its dying retail business.

Q: What are the growth prospects for Blackberry?

Blackberry is transforming itself into an IoT and cybersecurity company, targeting strong market growth. However, it struggles to deliver on its growth goals, and analysts expect a decline in revenue this year.

Q: How is Sofi Technologies positioned in the market?

Sofi Technologies offers digital banking services and has a banking charter, enabling it to offer a range of financial products. It has strong growth potential, primarily in deposit growth and loan refinancing.

Summary & Key Takeaways

• Retail investors now hold 25% of stock trading, giving them the power to move markets and squeeze short sellers.

• Canoe Inc is a pre-revenue electric vehicle company with significant orders and potential for high returns.

• GameStop has cash to survive, but management lacks a clear plan for a turnaround.

• Blackberry is transforming into an IoT and cybersecurity company, but struggles to deliver on growth goals.

• Bed Bath and Beyond faces significant debt and lacks a clear turnaround plan.

• Nokia is profitable, the least risky of the stocks analyzed, but with limited upside potential.

• Lucid Group faces challenges with order cancellations, cash burn, and shareholder dilution.

• AMC Entertainment has massive debt, making it an unsustainable business without a clear long-term plan.

• Sofi Technologies offers digital banking services and has strong growth potential, but faces risks from student loan forbearance.

• Palantir is trusted by the government and has strong commercial prospects, but may be overvalued.

• Rivian Automotive is the most popular Reddit stock, with significant institutional and company ownership, promising production growth, and attractive valuation.