Even as we enter the final throes of what has been a very strange summer, you can always trust the market to throw a curveball at you when you least expect it.
Yesterday, it felt like we all traveled back in time to the start of the year when shares of GameStop suddenly rocketed up almost 30% for… well, no reason at all really.
Why is GameStop stock rising again?
If you’re thinking, this all sounds very familiar, you’re damn right. And guess what? GameStop wasn’t the only one.
More of the meme class of 2021 received sudden bumps in their shares prices, including AMC (+20%), Clover Health (+10%), Blackberry (+9.5%) and Robinhood (+9%), who ironically has become a meme stock itself after apparently fuelling the trend in the first place.
Some might attribute the FDA’s approval of the Pfizer and BioNTech vaccine as a bull case for AMC, for example. However, the more likely reason is that the self-branded “degenerates” of the r/WallStreetBets community on Reddit are continuing to band together and target companies with high short interest in an effort to force a short squeeze and turbo-charge their returns.
Notably, the trading volume on both of these stocks jumped, with AMC surpassing 200 million shares traded for the first time since mid-June and GameStop witnessing about 14 million shares changing hands — more than ten-times the amount typically traded over the past five sessions.
Of course, you don’t need me to tell you about the dangers of trying to jump on these trends and investing in these stocks. Then again, with GameStop shares up more than 12-fold since the start of the year, what do I know?
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Head of Content and Publishing at MyWallSt
James is the head of content and publishing at MyWallSt. James’ favorite stock is Teladoc because he believes that they are at the forefront of revolutionizing the healthcare industry.