Remember the Meme Stock Revolution in 2021? Some smart guys behind the Reddit WallStreetBets subreddit and their community (more than 11.5 million members) pushed some penny stocks and transformed them into meme stocks. It was a wild ride for the shares of GameStop (GME) and AMC. These two stocks caught fire in early 2021 as Meme Stock Revolution took off.
On January 28, 2022, they are still up from a year ago, but they’re off to a brutal start in 2022. Shares of GameStop have plunged nearly 35% in January, while AMC has plummeted more than 40%.
The retail trading platform Robinhood, which went public last year became a meme stock itself following its initial public offering, has tumbled as well. Robinhood is down more than 25% this year and is trading at an all-time low. The plunge in Robinhood might be cause for celebration for other meme investors: the so-called “apes” on Reddit who attacked Robinhood last year for briefly restricting the buying of shares of GameStop and other meme stocks.
Some experts argue that the rise of meme stocks is a good thing as it helps to democratize the market. Many of the younger investors have a short-term trading mentality. The love the risk and volatility of meme stocks and cryptocurrencies.
Neither GameStop nor AMC are expected to be profitable this year, or even next. The sell-offs in meme stocks at the start of 2022 may be a sign that investors recognize that the Meme Stock Revolution might have been just another bubble.