While already the most shorted stock on the market, American Airlines Group Inc skyrocketed yet again after being mentioned on the Wall Street Bets forum on Reddit. This comes after GameStop Corp. stocks surged due to being the focal point of debate on the exact same forum.
American Airlines’s rapid ascent began as Reddit user u/cardiffgiantthe1st commented, “AAL the next GME?”, with GME referring to video game retailer GameStop, which quintupled in value over the past week.
American Airline’s shares incurred a 6.6% rise to $16.56 at Wednesday’s market close. This is the airline’s highest surge since December 3rd, while the majority of other major U.S. carriers’ stocks declined.
While the Fort Worth, Texas-based airline refused to comment on its latest surge, Vertical Research Partners analyst Darryl Genovesi explained that this gain isn’t “justified by anything fundamental”.
CFRA analyst Colin Scarola agreed with this sentiment, even mentioning the following in a client note: “We think the stock is a high risk for one of the recent retail-investor-driven short squeezes we’ve seen play out”.
Nevertheless, the CFRA has changed its recommendation on American Airline’s stock from hard sell to hold, even raising its price from $8 to $19.
