Shares of Allbirds (BIRD) soared 582% on Wednesday, as the shoe and apparel company announced a shift in its business model. Instead of focusing on footwear, Allbirds has pivoted to an AI-focused business model.
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Let’s check the calendar. April Fool’s Day was two weeks ago, so this is real.
The stock’s volume jumped from 63,000 shares on Tuesday to 283,000,000 shares on Wednesday, an increase of over 448,000% in one day.
Back in the Game
What does this mean? It’s not an indication that AI stocks are overbought. Key stocks in that sector are breaking out of multi-month consolidations, as explained here.
The rise of Allbirds indicates that retail traders are back in the game.
Retail traders are cheering the SEC’s decision to put an end to the Pattern Day Trader rule. That rule, a relic of the dot-com era, was designed to restrict activity by traders with accounts smaller than $25,000.
To sum up, retail traders are back, the Pattern Day Trader Rule is no more, and the S&P 500 and Nasdaq Composite are trading at new all-time highs.
Let’s take a closer look at three brokerage companies that are likely to benefit from this turn of events:
Interactive Brokers Group
Interactive Brokers Group (IBKR) is a highly automated, no-frills brokerage platform headquartered in Greenwich, Connecticut. The platform caters to both retail and institutional clients.
Like many brokers, Interactive doesn’t charge transaction fees to U.S.-based retail investors. Instead, it earns money from a variety of sources, including interest collected on margin loans and payment for order flow.
Like Allbirds and the S&P 500, Interactive Brokers closed at an all-time high on Wednesday. Interactive Brokers is scheduled to report earnings next week, after the close on April 21.
GRADE: A-
Robinhood Markets
Robinhood (HOOD) shareholders have had a rough ride. Over the past six months, shares of the California-based retail broker were halved, plunging from an all-time high of $153 in October.
That trend has reversed. Over the past three trading sessions, shares of Robinhood have gained 26%.
On Wednesday, Robinhood closed at a two-month high, as the stock reached its highest volume of the year. Robinhood is scheduled to report earnings on April 28.
GRADE: B+
Webull Corp.
Webull (BULL) shares jumped by 11% on Wednesday. While shares could continue to climb, Webull is still down by 84% over the past twelve months.
The competition for retail traders is fierce, and Webull’s clientele skews heavily to the retail side. This makes Webull the most speculative of the three stocks covered today.
Current conditions favor this sector, and Webull stands to benefit from a bull market with fewer restrictions.
GRADE: C+
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This article is being shared as premium content from TheStreet Pro. It was written by Ed Ponsi