Meme stocks are roaring again. Yes, again
NEW YORK — Meme stocks are shaking Wall Street once again Monday. And, as is so usually the case, it all started online.
A post on Reddit late Sunday indicated that Keith Gill, a central character in the original 2021 meme stock crack, had built a sizeable stake in GameStop. Shares of GameStop were up 35.1% to $31.27 in the early afternoon after jumping above $40 right after the opening of trading. AMC Entertainment, another popular meme stocks, rose nearly 16%.
If it all sounds familiar, it should. It was just three weeks ago that GameStop shares were soaring on excitement about a post on social media by another account tied to Gill. At that time, a Twitter account associated with him made its first posting since June 2021, though the gains fizzled relatively quickly.
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.
This time, Wall Street is better prepared to more easily digest the sharp movements, experts say. But some things remain firmly the same. Chief among them is the risk associated with such volatile stocks, where prices can soar — and crater — quickly. Here’s a look at what’s going on:
What triggered the latest moves?
Gill has become a hero online, known for continually professing how much he liked GameStop’s stock as it charged to heights in 2021 that professional investors saw as irrational. He even said it in testimony before Congress when it was looking into the meme-stock craze.
Late Sunday, an account on Reddit with the handle Deep F- - - - - Value shared a screenshot showing an account holding 5 million shares of GameStop stock, plus options to buy more. The total holdings were worth $181.4 million, as of Friday’s close, and the screenshot looked just like ones that the account had shared during the supernova run for GameStop in early 2021.
It was the first post for the Reddit account since April 2021, when it had posted what it called a “final update” on its “YOLO”, or you-only-live-once, investment in GameStop. Euphoria erupted quickly, with users on Reddit exclaiming “I’M HERE FOR HISTORY!” and “If he’s still in, I’m still in.”
When the stock market opened for trading on Monday, GameStop immediately soared.