In January 2021, the rise of retail investing and the subreddit r/WallStreetBets sparked a broader speculative movement in a few stocks that ended up disrupting trading at brokerages and culminating in a Congressional hearing.
And after a relatively quiet few months, the so-called meme stocks are back in a big way.
The movement's mascot, GameStop (GME), ended the week up 23.6%. (Analysts from Vanda Research said that this was likely due to institutional involvement rather than a big retail push.) And the new meme stock leader is AMC (AMC), which has taken over the narrative with an enormous 108.9% gain for the week.
AMC's stock was even up as much as 160% at certain points, with its market cap cresting an unbelievable $12 billion after almost going bankrupt earlier this year. The stock even broke call-volume records.
The latest boom in meme stocks echoes early 2021, when reddit users and a scattered group of stock-trading enthusiasts managed to drive the narrative on various stocks and drive prices significantly as the hype increased. (In the case of GameStop, Keith “Roaring Kitty” Gill, the architect of GameStop’s bull case, convinced many people.)
This extremely online community recently turned to talking up AMC, openly wondering about sending it “to the moon.” The stock was at $2.01 at the beginning of the year and is up over 1,200% to $26.
In the first meme stock frenzy, AMC went as high as $19 before falling to a relatively stable range of between $5 and $9. (For meme stocks, those enormous swings are small.)
Another element of the meme stock story still remains: the war against shorts.
Conspiracy theories abound around companies selling meme stocks short, often without owning them, a practice called “naked” short selling, which is not allowed but can still happen. This week, a campaign to squeeze potential shorts once again emerged with #AMCSqueeze trending on Twitter.
While Koss (KOSS) and GameStop saw similar action on Friday — one meme stock action appears to rally the basket — AMC’s rally coincides with the chain starting to reopen theaters, a sector that had obviously been badly hit by the pandemic.
Whether this is a coincidence or the actual reason for the hivemind rally is unclear. Crypto currencies and NFTs, the two other speculative frenzies of 2021 thus far, have chilled out of late after bitcoin (BTC-USD) and ethereum (ETC-USD) dipped significantly.
In any case, for now, the speculative momentum is back in the stocks.