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It’s been one year since GameStop mania rocked the financial world. Last January, a group of traders springing from Reddit’s WallStreetBets forum banded together to push up the then-struggling videogame retailer’s stock price, sending it from less than $20 per share to near $500 at one point.
The first investors did it because they saw an opportunity to make money. Soon, others — many with no investing knowledge — joined in, attracted by the storyline that they were engaged in a righteous battle to bleed the hedge funds shorting the stock dry.
For those following along, it was a wild ride for a few weeks. GameStop surged, Wall Street whimpered and the ability to trade the stock was restricted multiple times due to volatility. Members of Congress started getting involved, and the Reddit group targeted AMC and BlackBerry stock as well. Eventually, the investing app Robinhood was sued by users and investigated by governing bodies for halting trades.
A year later, things have more or less gone back to normal.
Some change has lasted: “Meme stock” has certainly entered the vernacular, at least for investors and the Reddit traders who popularized the term. The media in general is taking retail investors more seriously, says Anthony Denier, CEO of Webull, a trading platform. There’s still a devoted group of those investors chatting in forums online, looking for their next big trade.
“I think that’s a real positive thing, conversation leads to ideas,” says Denier. “That’s better than it only coming from traditional venues, which has been the case for a long time.”
But the major Wall Street reckoning that some participants said they wanted hasn’t, as of yet, materialized. Though there have been a few attempts to meme-ify other stocks over the ensuing months, GameStop 2.0 is TBD.
There are a few explanations for all of this. Though the market plunged at the beginning of Covid-19’s spread in the U.S., it had more than rebounded by January 2021, and making money trading was a real possibility for people who were staring down yet another day quarantining at home.
And after 10 months of canceled events and activities, it provided much-needed entertainment and a built-in community. When the David versus Goliath rhetoric started, traders could feel like they were part of something bigger than themselves.
In 2022, things are different. The market has been off to a shaky start, not on a constant upward trend. The message boards aren’t as exciting as they used to be. Stimulus money has run dry. Some individual investors who got in early came out ahead, but it is likely that many who jumped in at the climax have lost money, Denier says, as experts predicted at the time.
“Now it seems that meme stocks are becoming a thing of the past,” says Craig Birk, chief investment officer at Personal Capital. “The speculative frenzy, and just betting on stocks with nothing more than the hope that they’re going to keep going up, has faded away.”
A few things haven’t faded away, Birk says. Social media will continue to be an important tool for individual investors, allowing information to flow faster. The retail investor has a bigger voice than ever before.
But Birk also says that many of the meme stocks are down significantly from a year ago. While GameStop is still valued higher than it was pre-mania — it started 2021 at less than $20 per share — it closed at just under $100 per share on Tuesday, nowhere near the $483 intraday high it hit last January.
“For a time it was working, people were making money,” Birk says. “Making money is fun, losing money isn’t. And it hasn’t been fun for the last six months. People are moving on to different things.”
WeBull’s Denier adds that it’s possible for individual investors to help another meme stock take off. Meme cryptocurrencies, like dogecoin and their offshoots, are still hot. But last year’s frenzy isn’t likely to be repeated to the same extent anytime soon.
“I don’t know if there will be another one as big as GameStop,” he says.
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