What’s interesting about today’s meme-inspired rally in various stocks is the rather sporadic list of companies that are taking off today. Indeed, Velodyne Lidar (NASDAQ:VLDR) and VLDR stock is one such play that is up more than 20% today on very heavy volume.
There’s certainly some reason to be optimistic about Velodyne’s chances as a short squeeze play. It has been receiving mentions on the relevant social media platforms. And with roughly 24% of the company’s float short, this speculation makes sense.
Additionally, Velodyne Lidar has been one of those post-SPAC companies with a rather similar stock chart to its peers of late. A product of the 2020 SPAC boom, VLDR stock soared from its initial SPAC IPO price of $10 per share to as high as $32.50 late last year on strong momentum. However, since then, sentiment has waned in the SPAC space. And that’s putting it nicely.
Indeed, VLDR stock has hovered around (and even below) its SPAC IPO price since mid-May. However, today’s move appears to be a strong indication momentum could be back for this Lidar play. The first pure-play Lidar company to be publicly listed, Velodyne is hopeful today’s news can spur more investor interest in this stock.
Let’s dive into what was announced, and why investors are jumping into VLDR stock today.
VLDR Stock on the Move After Russel 2000 Announcement
Today, Velodyne announced the company is expected to be added to the Russell 2000 index. This inclusion is expected to take place at the opening of U.S. equity markets on June 28.
Any such announcement of the inclusion in an index is a meaningful one. Various exchange-traded funds and institutional buyers will be forced to buy VLDR stock. Accordingly, retail investors appear to be jumping the gun, hoping to get in at a better average price than their big-money peers.
For investors betting on the long-term viability of Velodyne, this move is also important. Why? Well, the inclusion of any stock in a major index like the Russell 2000 provides important confirmation. Investors want to know they can trust a company as a long-term investment. Indeed, Velodyne’s outlook looks much brighter today than it did yesterday. For retail investors, this is a very good thing.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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