Baosheng Media (NASDAQ: BAOS) stock rose as much as 800% yesterday before falling back after hours. There is no news from the company, nothing that changes their position as a small internet ad broker. But the stock price goes wild just because the stock price goes wild. Or, as we can also put it, BAOS is merely the latest in a line of meme stocks. Quite, exactly, what it is that sets off the mania in any specific stock is difficult to pin down. But we are seeing some commonalities.
This current set of manias seems to concentrate on Chinese companies. Top Financial, X Financial, Hongli, Huadi. For a couple of days there it seemed that is was financials but then there was that strong showing by the last two, pipe distributors. The what of the company not being the important part. Rather, small company with a low float. So, small amounts of buying can or even will trigger a significant change in price. Then the game is to see whether this becomes self-reinforcing or not - does the initial change in price attract enough buyers eager to get in on the deal to keep it going? That it's China stocks currently is much more to do with the idea that most investors won't know much about the background in which the company works. So, anything can be believed.
Baosheng stock price from NASDAQ
And that's really it, that's really all that is happening here. If enough people start buying then the price will move. The only difficulty is in organising enough people to start buying. We don't know who is doing that, we also don't know their next target.
What is becoming observably true though is that this is all happening faster. When AMTD went crazy - or MEGL a little later - prices were absurd for days at a time. As we can see from the above in Baosheng, we're down to mere hours now before the effects start to fade away. People are learning that is.
