Just when we thought people would start calming down with the “to the moon” and “diamond hands” chatter, meme stocks have taken off again — this time led by the formerly bankrupt movie theater chain AMC Entertainment ($AMC). Several stocks that shook up the market in January are bouncing back after some quiet months. This begs the question: Will meme stocks stick around for good?
Where it all started
It all started in January of 2021 when TikTok was writing sea shanties about failing video game stores tipping the stock market on its head. To fight back against hedge fund shorts — on stocks such as GameStop, AMC and BlackBerry — the Reddit forum r/WallStreetBets sent its massive following to buy up all of the stocks for these companies. GameStop’s stock alone has seen a 1,631% increase to date.
Then, the big man stepped in. Trading platforms like Robinhood began to limit buying on these stocks, and it seemed as though the Wall Street Bettors were defeated. But they didn’t actually stop. And months later, they’ve come roaring back and have $AMC and $GME up exponentially. So, where does that leave us now?
Could it last?
This round of meme stocking seems to have a little more staying power than last time. When GameStop broke the internet in January, the company was both mute and confused on why this was happening. This time around, AMC is leading the charge, taking advantage of the push.
After its initial rise, AMC sold off 11.5 million shares for “general corporate purposes.” Though this scared away some of its investors, AMC was able to pay off a large chunk of its debt and acquire theater assets. On top of that, they are capitalizing on all of the free publicity by offering perks to stockholders. If you own AMC stock, they will give you free popcorn at the theater!
Could this be a new technique to boost your company’s stock to the moon? Will other companies be launching campaigns to become the next meme stock? How can we predict who will be the next big winner on the market? Let us know in the comments!