What happened? The shares of BlackBerry (TSX:BB)(NYSE:BB) popped by about 15% Tuesday, October 19, to as high as $14.50 per share. BB stock erased some of these gains before settling at $14.23 per share — up 13.4% for the day. This sharp rally brought BlackBerry’s year-to-date gains to nearly 69% compared to TSX Composite’s 21% rise in 2021.
So what? As it often happens with many meme stocks, there was no company-specific news or update in the last session that could fuel BlackBerry’s massive rally. While the company has released several key updates in October, none of them helped BB stock post solid double-digit gains in a single day.
Investors who have been following BlackBerry stock’s crazy moves in 2021 could probably guess it right — it’s the Reddit traders!
Well, that’s my guess too. But let’s try to verify the guess by looking at some data now.
- Before yesterday, BB stock has posted similar or higher day gains only in six sessions in 2021 — four times in January and twice in June. In these two specific months, BB stock was very popular among Reddit traders or meme stock traders, especially on the WallStreetBets subreddit.
- According to the swaggystocks’s estimated data, BlackBerry stock’s popularity on the infamous WallStreetBets subreddit Tuesday suddenly spiked to its highest level in over a month.
- Yesterday, nearly 6.6 million shares of BlackBerry changed hands on the exchange. This volume was 144% higher than its daily volume three-month average of 2.7 million shares.
Now what? I’ve been optimistic about BlackBerry’s long-term growth potential for over a year. I believe its increasing focus on developing advanced automotive technologies — especially for electric and autonomous vehicles — could drive exponential financial growth in the coming years. That’s why I find BB stock worth buying for the long term.
That said, I can’t deny the possibility that mainly meme stock traders drove yesterday’s big rally in BlackBerry stock. And the sustainability of gains from such a rally is truly unpredictable in the short term.
The post Why BlackBerry (TSX:BB) Stock Popped 15% Tuesday appeared first on The Motley Fool Canada.
The Motley Fool recommends BlackBerry. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.
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