- Retail traders have poured $1.27 billion into meme stocks in past two weeks.
- The inflows match the peak of the GameStop short squeeze earlier this year.
- New names have emerged amid the renewed interest as the originals have also sprung back to life.
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Meme stocks have roared back to life in recent weeks thanks to the army of Reddit retail traders piling in.
The stocks, including AMC Entertainment, BlackBerry, and Clover Health, among others, have seen $1.27 billion of inflows in two weeks, matching the peak during the GameStop short squeeze in January, Vanda Research said in a Wednesday note.
The more than billion dollars of inflows have topped any other sector or industry, including the S&P tech sector, senior strategist Ben Onatibia and analyst Giacomo Pierantoni said in the note.
The renewed interest in meme stocks – a term that entered the spotlight earlier this year when retail traders caused GameStop shares to skyrocket and squeezed shorts – began two weeks ago after AMC Entertainment’s once largest shareholder Dalian Wanda Group sold almost all of its remaining stake in the company. Reddit traders cheered the opportunity to buy more into the stock and said the Leawood, Kansas-based company was now theirs.
In the following week, shares of the world’s largest movie-theater operator rallied to a record high, even as hedge-fund Mudrick Capital dumped millions of shares for a profit just after announcing it had purchased them.
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AMC led the rally last week among a string of meme stock names like BlackBerry, GameStop, Bed Bath & Beyond, Virgin Galactic, and Beyond Meat, as well as Canadian cannabis companies Tilray and Sundial.
This week, though, AMC fever has begun to fade, as Redditors have rallied around other companies.
Clover Health, the health-insurance provider backed by Chamath Palihapitiya, came back into the spotlight as it embarked on a three-day rally that more than doubled its price. Retail traders also hyped up new names like Clean Energy Fuels, the Newport Beach, California-based natural gas provider, and ContextLogic, along with electric-vehicle maker Workhorse and auto-retailer CarLotz.
Hype around Wendy’s was short-lived. The fast-food chain rallied to an almost two-decade high Tuesday, thanks to retail-trader hype, but then dropped the next day.
The meme-stock craze in recent weeks has mimmicked that of GameStop earlier this year when an army of retail traders, mobilized on Reddit’s Wall Street Bets, drove the stock’s price from low double digits to a record high close of $347.51 on January 27. The rally caused short sellers on the stock to lose billions on their bets. At the time, companies such as Nokia, BlackBerry, AMC, and others were also pulled into the craze.