Milwaukee Company Sees Stock Double Amid Meme Stock Craze
Koss stock up 270% since May 1, 100% Wednesday. At least two executives cash in.
Koss Corporation headphones. (Pixabay License).
They’ve done it again.
Milwaukee-based headphone maker Koss Corporation saw its stock price more than double early Wednesday due to a social-media-triggered squeeze.
Buyers appear to have rushed in, pushing the price up and triggering investors who sold the stock short (betting it would go down) to buy stock to close their trade.
It’s part of what’s known as a “short squeeze.” The move can send a stock quickly higher without an underlying change in a company’s fundamentals. Those who have shorted the stock are forced to buy shares to cover their position and avoid even greater losses, but their action causes even more buying. The result is a sharp increase in a stock price and big losses for short sellers.
The 2021 meme stock craze, driven by a Reddit user named Roaring Kitty, saw Koss’ stock spike 1,000% in January 2021 before sliding back down over the next year. Roaring Kitty quietly disappeared, with GameStop and other companies involved also trending back down alongside Koss.
But Roaring Kitty reappeared in May, and with it Koss spiked more than 40% on May 14. As of publication of this story, it’s up more than 100% Wednesday and 270% since May 1.
The company’s market capitalization, the value of all of its outstanding shares, has hovered around $20 million when momentum traders are ignoring it. But as of Wednesday, it’s more than $80 million. The company has 28 employees.
Companies with declining revenues, such as a brick-and-mortar video game retailer in an increasing online gaming market, are frequent targets of high-risk short sellers. Koss has reported a loss every quarter since the end of 2022.
But the executive team, most of which are family members, are doing well.
SEC designated insiders, including CEO Michael Koss Sr., own 45.3% of all shares. The CEO already sold 15,000 shares on May 30. Vice president of sales John Koss Jr. exercised an option to buy 25,000 shares at $2.17 per share on May 20, then immediately sold them for $5.25.
Koss insiders were also able to cash in on the craze in 2021.
Koss is headquartered at 4129 N. Port Washington Ave. Watch for flying champagne corks if you’re driving by Wednesday.
If you think stories like this are important, become a member of Urban Milwaukee and help support real, independent journalism. Plus you get some cool added benefits.
