Reddit investors shake up Wall Street

The latest GameStopped company is American Airlines, the world’s largest airline.

Thursday American was one of three US airlines – along with Southwest and JetBlue – report a record loss for 2020. American warned that its first-quarter loss will likely be worse than its fourth-quarter loss.

But shares soared pre-market following the report, at one point rising 87% before settling back down. Shares of American were up about 15% in early trading. Once again the rise appeared to be driven by posts on Reddit by some who hoped to drive up the price and put a squeeze on investors who bet against it by shorting it.

“AAL flying to moon?” wrote one investor. “Let’s see if we are going to get some tasty juice out of a squeeze.”

Those investors have recently driven up the price of shares of GameStop (GME), another troubled money losing company. According to S3 Partners, about 19% of American shares are controlled by shorts. No other US airline has as much as 5% of its shares held by shorts.

American CEO Doug Parker declined to comment on the stock move in his call with analysts and media Thursday: “As a rule, we don’t speculate on the day-to-day movements of our share price. We’ll stick to that rule today.”