Fungal bananas are going viral thanks to “Apes” on Reddit, and that’s how a new meme stock is born.
Shares in agribusiness giant Dole PLC DOLE,
The first theory, which is based on a U.N. Food and Agriculture Organization report that a fungus called black sitagoka has developed a resistance to fungicides in recent years and could present a huge threat to South America’s banana crops.
On Reddit, one popular post posits that Dole’s current slim margins on banana exports could expand significantly if the world faces a banana shortage, providing the company with a boost in profits.
The other, even more, popular bull thesis on Dole is a technical one delivered with a deliciously Reddit-y wrapper title: “DOLE: “There’s always [tendies] in the banana stand.”
From the archives (January 2021): Tendies? Diamond hands? Your guide to the lingo on WallStreetBets, the Reddit forum fueling Gamestop’s wild rise
In that post, user Uberkikz11 reels in fellow retail investors by writing “Back to the play that really ripened my banana. We’re talking about a literal ape play: the world’s largest producer of fresh produce, newly IPOed Dole Plc.”
Based on the notion that Dole’s stock has just entered the options market and will soon have more analyst coverage, new ratings and increased institutional ownership, Uberkikz11 foresees coalescence in a rising share price, after the company underperformed on its IPO.
Uberkikz11 also argues that Dole is not a growth play but a mispriced security. The post had received well over 3,000 upvotes in less than 24 hours.
Dole has another marker that is almost necessary in any meme stock.
According to Fintel, Dole’s short-squeeze score —a model used to identify the market’s biggest short-squeeze targets — puts the company in the top 20%.
MarketWatch data: Short interest: These are the stocks with the highest proportions of shares sold short
But fungus, mismarked securities and short interest aside, many retail investors are simply enjoying the idea that “Apes” are buying stock in bananas.
As WallStreetBets user kindafast215 put it Thursday morning “DOLE makes my banana SWOLE.”
