The meme craze has returned to the stock market in full force.
Stocks in movie theater chain AMC, video game retailer GameStop and home furniture retailer Bed Bath & Beyond soared on Monday, extending last week’s big gains.
AMC is up 16% and is now up 70% in the last five trading days, while Bed Bath & Beyond is up 40% on Monday and more than doubled over the past week.
GameStop is up 12% on Monday and has gained 30% over the past five days.
What’s happening? All three consumer stocks have a fanatical following among individual investors on Reddit and other social media sites.
These investors hope to punish professional hedge funds and large institutional companies that bet against these stocks by “shorting” them. Short sellers profit when a stock goes down.
This army of traders has galvanized Reddit to support these so-called meme actions – although there are serious doubts about the companies’ fundamentals. All three companies are expected to lose money this year and next.
Media streaming services and game downloads pose challenges for AMC and GameStop. Bed Bath & Beyond just fired its CEO after less than three years in the job after the company reported poor results in June.
But none of that matters to the “monkeys” on Reddit, a nickname many meme fans have adopted for themselves. GameStop and AMC also seem to appreciate their underdog status.
GameStop president Ryan Cohen, who also founded online pet retailer Chewy, tweeted after GameStop announced a new NFT marketplace in July that the “retailer left for dead just released something new.” The tweet ended with the blushing face emoji.
Cohen’s RC Ventures company is the main investor in GameStop and also recently bought a large stake in Bed Bath & Beyond.
AMC is taking its appreciation for “monkeys” a step further. The company announced earlier this month that it plans to reward shareholders with a special dividend to be paid in the form of an AMC Preferred Equity unit, a new class of stock that AMC has applied to list on the New York Stock Exchange under the symbol of a monkey.
AMC CEO Adam Aron said in a press release that the company is “rewarding and recognizing our passionate and supportive shareholder base.” AMC also intends to issue an “I OWN APE” NFT exclusively to these investors.
Even as short sellers continue to circulate these meme stocks, the “monkeys” may have the upper hand for now.
AMC shares are down 5% this year. That’s not as bad as the broader market, and it’s a relatively small loss considering stocks are up nearly 1,200% in 2021.
GameStop is up more than 20% in 2022 after a nearly 700% pop last year. Bed Bath & Beyond is still down more than 20% on the year despite the recent increase.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.