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Why Gamestop, Blackberry shares are soaring

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Yahoo Finance’s Julie Hyman, Brian Sozzi, and Myles Udland discuss which stocks are making moves this morning.

Video Transcript

JULIE HYMAN: Well, speaking of momentum, we continue to watch some of these names that have been shooting up, not just in today's session, but over the past several sessions. And also, as we talk about the role of retail investors in this market, it's interesting to note that on these very busy days, a lot of the platforms for those investors have outages. I'm just seeing on Downdetector, which is a website that monitors all this stuff, the likes of E-Trade, Merrill Lynch's retail platform, Schwab, Robinhood, Fidelity-- a lot of them are seeing outages today as we see a lot of the traffic.

And a lot of the traffic is around some of the stocks we've been talking about today-- the GameStops and Blackberries of the world. And a lot of folks who reside on Wall Street and not in the retail investing community are having a really hard time getting their arms around this. If you look at, for example, the gap between average price targets on the likes of a GameStop and where the stock is trading, you're seeing that kind of record gap between where Wall Street perceives the stock should be and where the stock actually is, which is just yet another measure of the divorce between the reality of where the stock is trading and the sort of fundamentals, which are, Myles, meaningless, I guess, at this stage.

MYLES UDLAND: Well, another fundamental is ownership. Is the stock heavily shorted, or is it not? And that is the fundamental that's in play right now. A name that is now rallying in today's session is FIZZ, National Beverage Company. They're the owner of LaCroix. That stock is about 50 percent sold short, and now that stock is up about 25 percent today.

GameStop-- again, we've covered that story. Bed Bath & Beyond-- that stock is rallying today. That's heavily shorted. Fubo-- recent IPO. Stock is heavily shorted, and it's up 15 percent today. AMC is a company that just came to market, so they're not going to go bankrupt. That stock is now rallying.

I mean, it kind of-- it goes on, and it goes on, and it goes on. Express, which we talked about earlier in the program-- that stock has doubled. BlackBerry shares-- they're up almost 40 percent today. And so everyone has kind of moved to this theme.

And I think what's also interesting here is that, you know, we talk about Wall Street like there's so many traders sitting there at their desk trading equities. But I mean, I think-- and it always struck me as odd-- we go back to the spring, and serious investors wanted to say, there's no way that Robinhood matters in the market.

But actual Wall Street has turned into a bunch of compliance folks, making sure that the flows that are supposed to be directed into passive funds get directed on time. There's not really that much stock-picking going on on Wall Street anymore. It shouldn't be surprising that retail is now the marginal bid that materially is driving what's happening in the markets. We've all seen the famous picture of the-- I think it's the UBS at the credit squeeze, trading floor up in Stamford. That's from 15 years ago. There is no trading floor anymore.

The weird thing about industry is that it's not really a world that exists in the way that people popularly conceive it as existing. It's individuals sitting at home with three screens, looking at Reddit, trading on their interactive brokers. That is the marginal bid within this market.

And so it is odd to sit here on a serious mainstream platform and be like, it can't be Reddit. It's literally Reddit. That's what's moving the market today. And I think that is kind of the odd thing about days like this.

BRIAN SOZZI: Yeah. Right on the house. It's just, I'm looking at the Yahoo Finance trending ticker page. I've been fixated on this all morning long. And you mentioned Express. Shares of Express are now up 101 percent. I can assure you, Express is not selling anything that will change the world, or that warrants it being worth 100 percent more today than last Friday. This is a forgotten retailer in the mall.

Now, I look at Bed Bath & Beyond. Its shares are up about 42 percent. Now, we've talked to the CEO, Mark Tritton. He's been on numerous times. He's doing some really good work there to turn the company around. But is this company worth 44 percent more today than Friday? And the answer is no.

So here. We are-- I'm the voice of reason. The fundamentals are just-- in no way, on some of these companies, justify these valuations. And it will end badly. It may not end badly this session. May not be tomorrow. But rest assured, it will absolutely end very badly for the traders trading these stocks.

JULIE HYMAN: I guess. We'll just have to see when and what triggers it, and whether they all blow up at once or just one by one. But I'm enjoying watching it while it's happen. I've got to say, it's easy to be entertained by all this when you're not subject to the crash when it does happen.

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