American Airlines spikes 31% as Reddit traders direct their attention toward another heavily shorted stock

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American Airlines spikes 31% as Reddit traders direct their attention toward another heavily shorted stock
An American Airlines Boeing 737 Max.Joe Raedle/Getty Images

American Airlines soared as much as 31% on Thursday as traders who frequent Reddit's Wall Street Bets forum sparked short squeezes in a growing list of stocks this week.

"AAL the next GME?" one Reddit user said in a post on Wednesday.

After squeezing hedge-fund managers out of GameStop, Reddit investors have set their sights on other highly shorted companies.

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American Airlines seems to have fit the bill, with about 30% of the float sold short.

The company had a catalyst to set the move on fire: fourth-quarter earnings.

On Thursday, the airline operator reported better-than-expected earnings results, beating both revenue and income estimates.

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Shares hit a high of $30 in Thursday's premarket trading session, representing a gain of as much as 81%.

And the gains in short-squeezed stocks don't appear to be letting up yet, as evidenced by GameStop, which soared by more than 40% in Thursday-morning trading, to a high of nearly $500.

Read more: MORGAN STANLEY: Buy these 17 stocks with strong earnings that are expected to outperform into 2022 even if the broader market sinks

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