'Meme stock' rally pauses, Redditors focus on biotech stocks

[June 14, 2021]  (Reuters) - Small-time stock traders turned their attention to the biotech and healthcare sectors on Monday, lifting shares of some by as much as 10%, while the rally in stocks that were favored in recent weeks appeared to fade.

People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

Of the top 10 stocks trending on trading-focused social media site Stocktwits, vaccine developers Novavax Inc and Vaxart Inc were in the third and fourth spots, respectively, with message volume on Vaxart up 9.7% and nearly 97% of them reflecting a positive sentiment.

Shares of Novavax jumped 10.3% in premarket trading as the company also reported late-stage data from a U.S.-based clinical trial showing its vaccine was more than 90% effective against COVID-19 across a variety of variants of the virus.

Individual traders on forums such Reddit's WallStreetBets have acted in concert this year to bid up shares of heavily shorted stocks, triggering a phenomenon known as a "short squeeze", which pushes up stock prices even more.

Video game retailer GameStop Corp and cinema operator AMC Entertainment, which were at the center of the so-called "meme stock" rally this year, have seen their share price soar more than 1,100% since the end of December.

AMC shares were up 3.5% in early deals after jumping more than 300% in the past three weeks. GameStop shares rose 1.1%, while Vaxart was up 1.6%.

Shares of gaming equipment maker Corsair Gaming Inc jumped 12.5%. The company - which has a short interest of 18.25% of free float, according to Refinitiv data - was the top trending stock on Stocktwits, with a 26.9% jump in message volume.

(Reporting by Sagarika Jaisinghani and Aaron Saldanha in Bengaluru; Editing by Shinjini Ganguli)

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