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Tuya, Inc. (TUYA) Stock Rises Inexplicably as Latest Potential Target of Meme Stock Phenomenon

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Tuya, Inc. (TUYA) stock prices were up by 9.12% as of the market closing on July 9th 2021, bringing it up to USD$20.35.Subsequent premarket fluctuations have seen the stock inch up by another 1.23%, bringing it up to USD$20.60.

MWC Exhibition

June 28th 2021 saw the company announce its exhibition at the Mobile World Congress, which was held in Barcelona from June 28th 2021 to July 1st 2021. The exhibition showcased the company’s Smart cellular and Bluetooth communication capabilities, facilitating the exposure of TUYA’s myriad of connectivity solutions. The industry’s biggest and most significant exhibition was attended by thousands of developers and enterprises from around the world.

Trading Volume Activity

Despite the expanded scope of businesses offered by the exhibition, the company’s stocks’ recent activity remains a mystery. With the company having been plummeting since July 2nd, the volume of shares traded went as far as more than one million in the red. Premarket fluctuations on the 9th of July 2021 saw a reversal and sharp increase in the volume of shares traded being bought. This comes despite any recent news coverage of company developments or changes in fundamentals.

Contextualizing TUYA’s Gains

Rather, in the absence of apparent motivating factors, TUYA seems to be the latest target of the meme stock phenomenon which has been seeing a massive resurgence in the stock markets. Driven by retail investors who target underperforming companies, the absence of underlying reasons to rationally invest in the company goes as far as to see companies with obvious reasons to not invest in being pumped and inflated.

Meme Stock Phenomenon

The companies selected in the meme stock phenomenon are usually ones that indicate a high short interest, signaling institutional investors’ confidence in the company’s stock price falling. Seeking to capitalize on this confidence and upturn the hold of institutional investors, retail investors coordinate to execute a short squeeze that has seen large firms lose billions and sometimes even cross the brink of bankruptcy. Given the nature of the movement, these gains in stock prices are rife with inherent volatility and risk.

Future Outlook for TUYA

Armed with the fortuitous surge in the value of its equity despite the lack of recent developments or changes in fundamentals, TUYA is poised to capitalize on the additional opportunities afforded to it as the latest target of the meme stock phenomenon. The company is keen to use the increased exposure to leverage to its advantage in order to usher in more organic growth.

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