- Earlier this week, as key indices such as the S&P 500 and Nasdaq Composite tanked, marquee meme names such as GameStop (+10.12%) and AMC Entertainment (+8.06%) shocked observers by staging sharp rallies.
- Gains in these meme stock names come at a time when broader markets remain volatile and could indicate that investors are clawing their way back into riskier assets.
The timing seems unlikely, but meme stocks could be making a comeback.
Even as the cryptocurrency markets burn and bounce back through a wholly avoidable disaster of Terraform Labs’ making and while traditional equity and bond markets are roiled, there appears to be an appetite still for the most speculative corners of the market.
Earlier this week, as key indices such as the S&P 500 and Nasdaq Composite tanked, marquee meme names such as GameStop (+10.12%) and AMC Entertainment (+8.06%) shocked observers by staging sharp rallies.
At one stage, GameStop soared as much as a third, triggering at least four trading halts as investors flipped shares of once white-hot meme stock names.
That rally spilled over to AMC Entertainment, the other poster-child of the meme stock mania that gripped Wall Street in January last year, and at one stage the movie theater company rallied by more than 30%.
Gains in these meme stock names come at a time when broader markets remain volatile and could indicate that investors are clawing their way back into riskier assets.
On Thursday, both GameStop and AMC Entertainment were among the most bought companies on Fidelity’s trading platform, suggesting that the demographic for buyers of the stock may be changing.
Last January’s meme stock rally was fueled primarily by zero-commission trading apps such as SoFi and Robinhood Markets, whose user-friendly interfaces made trading easy and fun.
While both GameStop and AMC Entertainment are well down from their all-time-highs, they remain up by over 400% from the start of 2021 and a basket of 37 meme stocks tracked by Bloomberg rallied 7.9%, looking set to snap a 5-day losing streak that wiped off over a fifth of value.
All things being considered, the Bloomberg tracker of 37 meme stocks is down only around 60% from a June 2021 high and that compares favorably to blue-chip tech companies, some of which are as much as 80% down from their all-time-highs.
It’s probably too early to call a rebound in meme stocks, but it’s definitely a sector worth keeping an eye on.
