Meme mania: Is the party over for stocks like GameStop and AMC?
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One year ago this week, retail investors on forums like Reddit's Wallstreetbets pushed GameStop (NYSE:GME) shares into the stratosphere. But will meme stock investing survive a bear market?
Last January, investors using platforms like Robinhood (NASDAQ:HOOD) swarmed GameStop (GME) shares, hoping to beat Wall Street short-sellers at their own game. Shares of the largely overlooked videogame retailer surged nearly 1,700% at one point in late January and finished the year up 688%. In comparison, the S&P 500 Index ended 2021 up 29%.
After conquering GameStop, meme stock enthusiasts took on AMC Entertainment (NYSE:AMC), putting shares of the pandemic-slammed movie theater chain on a trading rollercoaster that pushed the stock higher by nearly 1,200% by the end of 2021.
What a difference a year makes. After meteoric rises in 2021, both GameStop and AMC are down 33% and 41%, respectively, during the first few weeks of 2022.
GME and AMC represent the highest-profile members of the meme club. However, as they started tapering off in Q4 2021, other popular meme plays followed suit, including names like Context Logic (NASDAQ:WISH), Clover Health (NASDAQ:CLOV), DraftKings (NASDAQ:DKNG) and Rocket Companies (NYSE:RKT).
Some Wallstreetbets fan favorites never gained traction. Clover Health, for example, saw its shares tumble 79% during 2021, while ContextLogic shares plunged 83%, DraftKings slid 41% and Rocket dropped 31%. Even Palantir (NYSE:PLTR) shed 23% in 2021. All are down double-digits this year, save for Rocket, which has fallen only 7% year-to-date.
Other frequently mentioned stocks fared better, particularly the more established tech plays. Shares of Advanced Micro Devices (NASDAQ:AMD), Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) all received significant retail attention -- and all showed sustained momentum throughout much of 2021. But these names are also down double-digits in 2022, mirroring the S&P 500, which has retreated 9%, year-to-date.
Not surprisingly, enthusiasm for meme-stock focused FOMO ETF (BATS:FOMO), which was launched in May 2021 by Tuttle Capital Management, has also fizzled. The ETF slid 10% in 2021 and has fallen 5% since the beginning of the year.
Meanwhile, the party may not be completely over for GameStop. Last week the stock rallied over 30% on news that it was getting into the NFT market.