AMC, BlackBerry shares surge with GameStop. This is why meme stocks are back.

It’s like 2021 again — at least, in a bullish-on-steroids corner of the stock market.

Many “meme stocks,” or companies whose shares are fueled by social media buzz rather than traditional business fundamentals like growth and profits, rose before the start of trading Tuesday. This is the second consecutive day when such shares have come to the stock market after GameStop. 72% surge on Monday.

along with other favorites wallstreetbetsThe Reddit forum that fueled the meme-stock craze three years ago jumped in pre-market trading Tuesday. These include movie-theater operator AMC Entertainment, whose shares rose 78% in premarket trading, and BlackBerry which gained 26%. GameStop shares surged more than 130%.

The resurgence of the meme stock phenomenon occurred when trader Keith Gill, also known as “Roaring Kitty”, resurfaced on X (formerly Twitter) after a three-year hiatus and posted a. sketch On Sunday night a man was leaning forward on a chair. Gill became the face of meme stock traders after purchasing GameStop shares for $53,000 in 2019 and reportedly turning it into a multi-million stake due to the hype surrounding the stock.

Once again, traders are posting about meme stocks on WallStreetBets, urging others to buy a stake in GameStop and additional meme favorites with the word YOLO, or “You only live once.” Others posted screenshots of their profits from AMC, BlackBerry and additional shares.

heyOther stocks getting a boost in the meme stock resurgence include:

  • SunPower Corp., a photovoltaic solar power company, whose shares jumped more than 107% in premarket trading
  • Plug Power, a company that makes hydrogen fuel cell systems, with a 43% profit
  • Virgin Galactic, Richard Branson’s spaceflight company, up 16%
  • 20% increase in plant-based food manufacturing company Beyond Meat

In the case of SunPower and Plug Power, the companies may also have attracted interest from traders because of President Joe Biden Announcement of new tariffs On Chinese EV, solar cells and other products.

“Extreme speculation”

The appeal is simple: an opportunity to make quick money in a short period of time, with a bonus for those professional traders on Wall Street who have steered clear of meme stocks.

,[W]I expect traders to pile in, not because they think the memes have any real value, but because they hope others will get FOMO (fear of missing out), drive the price up and then they will sell it and make a quick profit. can earn, Nigel Green, CEO of financial advisory firm Deavere Group, said in an email.

But there are very real risks, Green said.

“Sure, some people can make big, big money,” he said. “But let’s be absolutely clear: This is extremely speculative, and valuations can be expected to be incredibly wild – in both directions.”

The immediate casualties are not retail investors, but hedge funds and other traders who had bet that GameStop’s stock would decline. Such a strategy, called short selling, involves a trade that makes money if a stock declines – causing investors to lose money if the stock declines.

Hedge funds with short positions in GameStop lost more than $1 billion on Monday, analytics firm S3 Partners told CBS MoneyWatch.



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