Shares of Williams-Sonoma (WSM 11.62%) were moving higher today primarily due to a case of mistaken identity.
The launch of a Wall Street Memes token with the same ticker (WSM) seemed to cause some investors to buy Williams-Sonoma stock. On X, formerly known as Twitter, most references to the cashtag “$WSM” were to the Wall St. Memes token, not Williams-Sonoma, evidence of the confusion.
As a result, Williams-Sonoma stock was trading up 11.5% as of 3:26 p.m. ET Monday.
There was no company-specific news out on Williams-Sonoma, and as further evidence that investor error was the reason for the gains, trading volume was much higher than normal with 4.45 million shares having changed hands near the closing bell, compared with its average of 1.06 million.
This isn’t the first time something like this has happened. When Zoom Video Communications was gaining popularity early in the pandemic, it lifted shares of Zoom Technologies, which had the ticker “ZOOM.”
There have been similar examples with less prominent stocks as well.
Additionally, about 19% of Williams-Sonoma stock is sold short, so it’s possible that a short squeeze contributed to today’s rally as the stock climbed through the session.
Of course, today’s gains aren’t a reason to buy Williams-Sonoma stock. In fact, it’s likely that the stock will fall once investors who intended to buy the Wall St. Memes coin realize their mistake.
Outside of today’s movement, Williams-Sonoma still looks like a promising long-term bet, though sales are currently declining due to the slowdown in the housing market.
Still, the company has continued to achieve strong operating margins, at 14.6% in the second quarter, and the stock looks like a good value, trading at a price-to-earnings ratio of just 10.4.
Jeremy Bowman has positions in Zoom Video Communications. The Motley Fool has positions in and recommends Williams-Sonoma and Zoom Video Communications. The Motley Fool has a disclosure policy.