Urban One UONEK Stock News

Urban One Inc (NASDAQ: UONEK) is flying in the market this morning, trading on gains of more than 100% after similar movement in the market yesterday. Interestingly, there has been no news out of the company. So, what’s the deal? Here’s why the stock is flying:

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Why UONEK Stock Is Rocketing

As mentioned above, Urban One is rocketing in the market for the second consecutive trading session. But, with no news, many are scratching their heads, wondering what’s going on.

If you dig into the stock, you’ll see that the only news that has come out of the company is a disclosure that Bridge Capital Management sold its entire 3.9 million share stake in the company. However, when big money sells massive amounts of shares like this, stocks tend to fall in value. What’s the deal here?

Well, there are a couple of factors to consider here:

  • Liquidity – Traders generally are the fuel behind moves like this and there are few things that traders like more than liquidity. When Bridge Capital Management sold its shares, it made it clear that UONEK was a highly liquid stock, and that’s exciting to some.
  • Equal Opportunity Movement – Since the killing of George Floyd, we’ve seen protests, riots, and the news being flooded with a movement surrounding equal opportunity for black Americans. So, what does that have to do with the stock? EVERYTHING! The target audience for Urban One is black America, and with the current movement, this is great news for the stock.
  • Short Squeeze – Perhaps the biggest driver of movement here is the fact that the stock is going through a short squeeze. Due to the poor performance of the company and its tough financial position, short volume on the stock has been incredibly heavy in recent times. When a heavilly shorted stock starts to tick upward, shorts start to lose money. So, they race to purchase shares to cover their positions, leading to an extreme run in both volume and price in what’s known as a short squeeze. That seems to be taking place now with UONEK.

The Bottom Line

The bottom line here is simple. Urban One is making a tremendous run for the top, but nothing has fundamentally changed about the company. The only difference is that high liquidity led to excitement among investors, triggering a short squeeze.

With that said, I’ve seen short squeezes last hours and I’ve seen them last days. Who knows when this one will reach the top and start to reverse? What we do know is that there seems to be more opportunity ahead.

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