Loss-making GSI Technology Inc. is the latest small-cap stock to spark meme-like buzz.
On Friday GSI Technology’s
GSIT,
stock rose 210.4% to close at a new high of $5.09 on volume of 104.6 million shares, well above its 65-day average of 1.73 million shares. Multiple block trades were placed Friday, representing 6.9% of the float for GSI Technology, according to FactSet.
GSI Technology’s stock fell 3.5% in premarket trades Monday and has been attracting attention from users posting on Reddit. The stock is up 194.2% in 2023, compared with the S&P 500 index’s
SPX,
gain of 7.4%.
Founded in 1995, GSI Technology designs and develops memory products for the telecommunications and networking industries. The Sunnyvale, California-based company describes itself as a leading provider of Static Random Access Memory (SRAM) semiconductor products.
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With a market cap of $125.7 million, GSI Technology is relatively small, particularly when compared with meme stock darlings AMC Entertainment Holdings Inc.
AMC,
and GameStop Corp.
GME,
During its fiscal third-quarter results in January, GSI Technology reported a net loss of $4.8 million dollars, compared with a $4.6 million loss in the prior year’s quarter. The company has reported a net loss for more than a dozen straight quarters. GSI Technology reported third-quarter revenue of $6.4 million, down from $8.1 million in the year-ago quarter. In a statement, the company’s CEO Lee-Lean Shu said third-quarter revenue was impacted by “the uncertain outlook for the global economy.”
The memory specialist reports fourth-quarter results after market close on Tuesday.
An influential meme stock trader, who goes by the name Obi and participates in the WallStreetBets group on Reddit as Major-Access2321, told MarketWatch that he sees meme-like parallels between GSI Technology and Top Financial Group Ltd.
TOP,
The Hong Kong-based trading firm’s stock skyrocketed more than 890% last month, before pulling back.
Related: After TOP Financial’s surge, influential meme-stock trader looks for next big opportunity
GSI Technology is “set up” like Top Financial was before a recent short cover wave, Obi, told MarketWatch. The meme stock trader has over 29,000 subscribers to his Making Easy Money YouTube channel.
Covering occurs when a person with a short position buys back the shares, ending the short trade and returning the shares to the seller. A short squeeze occurs when many investors start buying a stock at the same time in an attempt to cover short positions.
