What Happened?
Shares of e-commerce florist and gift retailer 1-800-FLOWERS (NASDAQ: FLWS) jumped 6.9% in the morning session after the stock continued its rally as it was caught up in a broader 'meme stock' trend, fueled by its high short interest.
The move appeared to be driven by market dynamics rather than company-specific news. 1-800-FLOWERS became a target for traders due to its significant short float, which was recently reported to be over 71%. A stock with high short interest was subject to a 'short squeeze,' where a rising price forced investors betting against the stock to buy shares to cover their positions, which further accelerated the price increase. This rally was part of a wider resurgence in so-called meme stocks, as other heavily shorted companies also experienced gains amid a general 'risk-on' environment among traders.
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What Is The Market Telling Us
1-800-FLOWERS’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 14.6% following its inclusion in a broader "meme stock" rally targeting heavily shorted companies.
The online retailer became a target for retail traders due to its high short interest, which stood at a reported 71.66%. This situation created the potential for a "short squeeze," a technical event where a rising stock price forced traders who bet against the stock (short sellers) to buy shares to cover their positions, pushing the price even higher. Adding to the momentum, the stock experienced a surge in speculative options activity, with traders making bullish bets on the company's short-term price movement. The rally occurred in the absence of any new company-specific financial news or press releases. The move also came amid a positive backdrop for the consumer retail sector, which saw broad gains after upbeat retail sales data eased economic worries.
1-800-FLOWERS is down 12.4% since the beginning of the year, and at $6.84 per share, it is trading 34% below its 52-week high of $10.36 from July 2024. Investors who bought $1,000 worth of 1-800-FLOWERS’s shares 5 years ago would now be looking at an investment worth $268.03.
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