Yet while the shares of companies like GameStop and AMC Entertainment have slumped since skyrocketing early last year, they haven’t nosedived as many establishment experts predicted.
Last year’s heady rush into heavily shorted stocks gave embattled companies such as GameStop, Bed Bath & Beyond and dozens of others a new, if tentative, lease on life.
As for AMC, a struggling theater chain, it’s still to be determined whether cinema audiences will return after getting accustomed to watching films at home, Kinahan said.
Higher interest rates often correlate with lower valuations for riskier assets, with investors fleeing meme stocks, cryptocurrencies and the electric-vehicle sector.
Just as meme stocks led the broader market last year as they ballooned in price, they’re now leading the drop.
But while many of the meme stocks that flew high last year have fallen, their mere existence signifies an important shift in the market, according to Wall Street watchers.
In his definition, a stock has “momentum” when its price has changed significantly in the previous week at the same time it is attracting attention on social media and Wall Street.