MediaCo Holding, Inc. (MDIA) stock prices plummeted by 51.18% as of the market closing on July 13th, 2021, bringing the price per share down to USD$8.30. Subsequent premarket fluctuations have seen the stock surge by 20.24%, bringing it up to USD$9.98.
Changes in MDIA Leadership
The latest news from the company came on June 11th 2021, when the company announced the appointing of a new Chief Executive Officer, effective as of July 1st 2021. Mr. Lindsay has a wealth of experience, spanning two decades of leadership across the media, television and advertising spaces. He will be responsible for deciding MDIA’s overall strategic vision, aiming to expand its radio and outdoor divisions.
Volume of Shares Traded
The company’s stock price started climbing on July 12th, 2021 after an extended period of relative stability. The massive surge of volume of shares traded went from a few dozen thousand up to a peak of almost 10 million over the course of a day. With no reason to assume developments that have not yet reached the public, this movement happened too rapidly for the stock to have gained momentum among investors, thereby resulting in a snowball effect.
Contextualizing MDIA’s Volatility
Rather, in the absence of any media coverage of significant developments or changes in fundamentals, it is highly likely that MDIA has found itself to be the latest target of the meme stock phenomenon that has been spreading like wildfire across the stock markets. The pumping and inflating of the equity value of underperforming companies go as far as to see companies heading towards bankruptcy being brought back from the brink of closure.
Meme Stock Phenomenon
A common denominator among the stocks being targeted by the meme stock movement seems to be high short interest, signaling institutional investors’ confidence in the company’s stock price falling. Accordingly, retail investors coordinate to execute a collaborative short squeeze, seeking to capitalize on the confidence of the institutional investors. As a result, some of the biggest names in finance have seen losses in the billions, with some going as far as to declare bankruptcy. Given the largely random driving forces behind the movement, these gains in stock prices are rife with inherent volatility and risk.
Future Outlook for WORX
Nevertheless, armed with the fortuitous surge in equity value, MDIA is poised to capitalize on the opportunities afforded to it from the expanded scope of exposure it has received as a result of its recent rollercoaster ride. Current and potential investors are hopeful that management will be able to leverage the resources at their disposal to facilitate more organic growth over the long term.
