Second GameStop Incident? ... Support.com Stock Price Up 34% in One Day

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] A little-known American software company saw its stock price triple in just one week amid a power struggle between individual investors and short sellers.

According to the Wall Street Journal (WSJ) on the 30th (local time), Support.com closed at $36.39 on the Nasdaq market, up 34.2% in a single day. The company's stock price was around $2 per share earlier this year.

As a result, the company's stock price has soared threefold in the past week and surged 1500% compared to the end of last year.

The WSJ interpreted this as "similar to the 'GameStop' stock earlier this year, where institutional investors' short selling was concentrated, individual investors aiming for a short squeeze drove buying momentum, causing the stock price to surge."

A short squeeze refers to a situation where short sellers, who borrow and sell stocks expecting the price to fall, are forced to buy stocks when the price rises.

According to analysis firm S3 Partners, the short interest ratio relative to Support.com's float has recently exceeded 60%, indicating a high level.

However, the WSJ explained that the recent surge in the company's stock price was not due to a short squeeze but mainly caused by individual investors' purchases of physical stocks and options trading.

Support.com's short interest ratio fell by about 3 percentage points last week but not enough to trigger a short squeeze-induced price surge.

In contrast, individual investors' net purchases over one week amounted to $38.1 million (approximately 44.42 billion KRW), and call option trading also increased.

A call option is a contract that grants the right to buy a specific stock at a predetermined price on the expiration date, and investors typically buy call options expecting the stock price to rise.

This content was produced with the assistance of AI translation services.