Invesco Mortgage Capital (IVR) Stock Consolidates After The Recent Jump
10:31 am Thursday, June 24th, 2021
As far as the stock markets are concerned, 2021 has been the year of Reddit meme stocks and the phenomenon seems to be only getting stronger as the year progresses.
Due to the enormous gains recorded by many of these meme stocks, investors are now known to keep tabs on stocks that are discussed on the message boards. It seems that the latest stock to have caught the fancy of those investors is that of Invesco Mortgage Capital (NYSE:IVR). The company is involved in the mortgage real estate business but the coronavirus pandemic had come as a hammer blow to its business.
However, it is well known that retail investors from Reddit are well known for going after stocks of companies that may be struggling. At this point, the stock and the company are both in pretty bad shape.
Over the past months, these investors have looked into stocks that have considerable short positions and then raked in the profits by way of a short squeeze. When a large number of investors start bidding high for a stock then it forces short sellers to cover their positions in order to limit their losses and that leads to a successful short squeeze.
It seems that Reddit investors are looking for a similar move with the Invesco stock. However, it should be noted that these moves do not last although they can generate handsome profits for the investors.
On the other hand, the short interest in the Invesco stock as of May 28, 20121 is 17% and that is not particularly high when compared to some of the other meme stocks. Hence, it might be actually difficult for the Reddit investors to spark a short squeeze. Moreover, on a fundamental level, if there is any rise in interest rates then it could seriously affect Invesco’s business and that is another factor investors need to keep in mind.
