There is an area of the financial markets where investors need to know they are on their own — meme stocks. That said, are they really on their own? Thousands of investors piled on into the crazy world of meme stocks before. Many of them made a lot of money, and many lost far more than they could afford to lose.
Shares of GameStop Corp. (NYSE: GME) had at one point more than doubled on Monday morning. The entire move was after Keith Gill, who with his “Roaring Kitty” name and what became an army of retail investors in the meme stocks, posted on X (what most of us still call Twitter) for the first time in three years. Gill’s post was an image of a meme that implied “getting serious”…
The move in GameStop had created trading volume of 50 million shares in the first hour alone on Monday. The shares had briefly more than doubled to a daily high of $38.15, last seen up “only about 75% at $30.80. And there have been multiple halts for trading volatility. And interestingly enough, GameStop shares were just at $10.91 on May 1 — to close at $17.46 last Friday, for a 60% gain in less than a month even before Monday’s trading explosion. Trading volumes had also already moved up to well over 20 million shares a day before this move.
GameStop’s gain was not isolated. Another meme stock of that craze was AMC Entertainment Holdings Inc. (NYSE: AMC), and it was last seen up 14% at $3.32 with more than 100 million shares in less than a full hour of official trading since the open. AMC shares were still down about 50% since the start of 2024 ahead of what is looking to be the softest slate of summer movie releases in years outside of the pandemic.
BlackBerry Limited (NYSE: BB) had been another of the meme stocks, albeit with a less explosive upside. BlackBerry shares were last seen up 6% at $3.08 on a “more rational” 6 million shares within the first hour of official trading.
Meanwhile, the “picks and shovels” behind meme stocks took some interest from meme traders as well. Shares of Reddit, Inc. (NYSE: RDDT) were last seen up 12% at $60.00 with more than 4 million shares traded in the first hour. BuzzFeed, Inc. (NASDAQ: BZFD) was last seen up 4% at $2.10, although trading volume was only about 200,000 shares on the day.
The history of the meme stock craze, with the wild ride up and the plunge in the aftermath, hardly needs a retelling. There was already the “Dumb Money” which outlined the surge and the crash that followed. Perhaps you remember the term “stonks” instead of stocks. And keep in mind that other meme names like Bed Bath & Beyond and Express have since all but faded into history as far as their stocks are concerned.
Strategic Bull? Chicken Bull? Sitting Bull? “Short-Seller-Killer” Bull? Whichever type of “bull” you want to be in meme stocks, where the fundamentals may simply have started out as targeting short sellers, you better understand that you are on your own… well, at least you and a potential army of thousands of retail investors.
