How Meme Stocks Have Changed Markets

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How Meme Stocks Have Changed Markets

How Meme Stocks Have Changed Markets

Meme stocks like GameStop have changed the market scenario in past one or two years. The GameStop stocks took a rollercoaster ride about a year ago due to Reddit. It was 25 January 2021 when it was traded at $61 and after three days it was as high as $483. At one point, with the rocket rise of more than 200 percent, the GameStop stocks were restricted from trading.

Meme stocks have been the most-watched amid the pandemic phase and online traders banded together on various social platforms including Reddit's r/wallstreetbets to make a quick profit. The meme traders primarily focused on two stocks. One is as mentioned the GameStop Corp., which is a video game retailer, and the other is theater chain AMC Entertainment Holdings.

Prior to the meme craze, the GameStop stocks were traded at around $4.80 and these days it is being traded at around $120. In between, it was as high as $348.50. Similarly, the AMC's average price was $5.76 before the peak of $72.62. Today, its stocks are being traded at around $18.

Both the companies were financially weak and their stock prices were priced at around $5 earlier. These were cheap stocks and promotion of the stocks through various social media means reaping enormous profits.

GameStop's financials are at a low price now than what was witnessed before the meme craze. However, the bottom line of AMC has shown some improvement, but it is still below the period that was before.

Meme stock means gaining momentum with the help of platforms like social media and achieving a catch fire status with multiple individual investors and resulting in skyrocketing share prices. The prices in fact explode due to the collective actions of social users.

Meme stocks have rallied throughout 2020 and 2021 due to the COVID-19 pandemic when the financial market was down and investors looked for alternate places to invest money.

According to Forbes observers, the Americans were locked indoors during the pandemic and engaged themselves with something interesting and different and one of the ways was to invest money even without experience or knowledge about the market.

Trading platform Robinhood witnessed explosive growth throughout 2021. Active users counted 22.5 million during the year. Today, similar social platforms like Reddit's r/wallstreetbets have no impact on the meme stocks and it is being observed as the end of meme trading that was at a great high. Meme traders have shifted towards non-fungible tokens (NFTs), which have no fundamental value.

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