GameStop followed suit in 2021, raising nearly $1.7 billion via a secondary offering of 8.5 million additional shares at an average price of more than $200 per share. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading switzerland gdp and economic data expertise, Adam is an expert in economics and behavioral finance. Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology.
All this seems like very bearish news, so its convert us dollars to russian rubles short interest rose to 27%. Information contained on this website is general in nature and has been prepared without any consideration of customers’ investment objectives, financial situations or needs. Customers should consider the appropriateness of the information having regard to their personal circumstances before making any investment decisions. No content on the website shall be considered as a recommendation or solicitation for the purchase or sale of securities, futures, or other financial products. All information and data on the website are for reference only and no historical data shall be considered as the basis for predicting future trends.
Investing in meme stocks and ETFs
“Do we think more retail traders can jump in on the trend in the coming days? Yes. Do we think this is a repeat of 2021? No, and the chances we reach that stage are low.” The stock market is in the thick of another meme stock frenzy, sparked by Sunday night’s online return of one of the key figures of the 2020 and 2021 craze that sent GameStop (GME) shares to record highs. Ever since bands of smaller-pocketed and novice investors began taking stock prices of downtrodden companies to breathtaking heights three years ago, the potential for more flareups has been obvious. If you’re not interested in building and managing your own portfolio of meme stocks but still want some exposure to the movement, there are some ETF solutions to help. One example is the VanEck Social Sentiment ETF (BUZZ 1.8%), an actively managed portfolio of 75 stocks that rank high in social media conversations.
Related investing topics
But in the short term, what sets a stock’s price is how much investors are willing to pay for it. And, on Monday at least, people are willing to pay much higher prices for shares of GameStop. Meme stocks are low-priced stocks that ran up in price for no particular fundamental reason other than short-squeezes perpetuated by retail investor enthusiasm and social media hype.
As a result, meme stocks can become overvalued relative to fundamental technical analysis. Meme stocks have been a boon to investors, day traders, and brokerage platforms but companies have also capitalized on the meme stock phenomenon. As a result of sky-high prices and persistent demand for shares among individual investors, AMC Theaters CEO Adam Aron took advantage of the elevated valuation and engaged in a series of secondary (follow-on) offerings in 2021.
GME Is Squeezed Again
AMC’s stock closed Tuesday at $6.85 and has risen 135% since Friday, but it’s a far cry from its all-time highs above $300 set in June 2021. GameStop’s stock price has gained 179% over the past two sessions, though at $48.75 it’s still well below its record of more than $85 in January 2021. A member of the hot 2020 IPO stock class, Palantir quickly gained a large investor following after making its public debut. The company builds enterprise big data and AI software that helps organizations top 5 reit stocks im buying for 2021 update their operations for a digital era. Palantir has concentrated exposure working for government entities, but it’s quickly working to expand further into the private sector. This Canadian company is known for pioneering the smartphone, but it quickly went by the wayside when Apple revolutionized the space.
- Legendary investor Warren Buffett offered an observation on market behavior in his 2023 letter to Berkshire Hathaway shareholders.
- However, for those seeking sustainable long-term gains (the way real multigenerational family wealth is built up), look to build a portfolio of multiple meme stocks that have more than just a one-off chance of providing returns.
- While everyone wants to know, “What is the next meme stock to surge?” it’s important to know what happens to most meme stocks.
- Though there is a potential for monumental gains, meme investors are more likely to experience potentially bigger losses as the stocks become overvalued and their price dramatically plummets.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date. Gill, who previously worked in marketing at an insurance firm, posted an image of a man leaning forward in his chair, a meme that is used by gamers to show that things are getting serious. In its first-quarter earnings report last week, AMC disclosed a net loss of $163.5 million as the theater chain works to recover from the large amounts of debt it took on to stay afloat during the pandemic.