Here’s a list of the most shorted stocks that could be targets for the Reddit crowd

Published Tue, Jan 26 20211:36 PM ESTUpdated Thu, Jan 28 20219:49 AM EST

The relentless rally in GameStop is telling Wall Street that average Joe day traders can't be underestimated. An army of retail investors cheered each other on in the "wallstreetbets" Reddit forum with more than 2 million subscribers, piling into GameStop's stock and options. The buying frenzy has prompted GameStop shares to quadruple in the past two weeks, inflicting huge losses for short sellers in the name. The Reddit crowd has already spotted other popular short targets by hedge funds, including Bed Bath & Beyond , pushing stocks higher. Here are other names they could go after: Despite the massive squeeze, GameStop remained the most shorted stock in the market, according to data from S3 Partners. The stock got another boost Tuesday after Social Capital's Chamath Palihapitiya said in a tweet that he bought GameStop call options betting the stock will go higher. One trending Reddit post stated Palihapitiya's move, saying "he's one of us." The post drew more than 1,000 replies in an hour. Rookie investors have also been pushing troubled retailer Bed Bath & Beyond higher this week, creating a big short squeeze in the name. When a highly shorted name suddenly rallies, hedge funds and other traders who bet against it would have to rush to buy shares to cut their losses. Ligand Pharmaceuticals is a heavily shorted stock with 64% of its float shares borrowed and sold short, the third most-hated name on Wall Street, according to data from S3. The stock has rallied 13% this week alone, pushing its January gains to more than 60%. National Beverage is another one with more than 60% of its available shares sold short. The stock has also been on the rise, rallying nearly 40% month to date. Other popular short targets by hedge funds include Macerich Company , FuboTV , SunPower , Tanger Factory Outlet Center , AMC Networks and Tootsie Roll , according to the data. To be sure, this speculative behavior from the retail crowd is unnerving many on Wall Street. Some say the frenzy speaks to frothy investor sentiment and often occurs before the overall market peaks. It could end at any time, burning those buying these stocks for the artificial pop. "The real issue surrounding the irrational rally in GME is that it shows what can happen when too many people get on one side of the boat...especially when they get to that one side of the boat with large levels of leverage," Matt Maley, chief market strategist at Miller Tabak, said in a note. Meanwhile, investors late to the game could also get burned in these highly shorted names.

A GameStop location with sign "We Buy Your Games and More"

Scott Mlyn | CNBC

The relentless rally in GameStop is telling Wall Street that average Joe day traders can't be underestimated.

An army of retail investors cheered each other on in the "wallstreetbets" Reddit forum with more than 2 million subscribers, piling into GameStop's stock and options. The buying frenzy has prompted GameStop shares to quadruple in the past two weeks, inflicting huge losses for short sellers in the name.

The Reddit crowd has already spotted other popular short targets by hedge funds, including Bed Bath & Beyond, pushing stocks higher. Here are other names they could go after: