- Meme stocks have struggled in the past week and a half but are still hanging around.
- Shares of Bed Bath & Beyond and AMC Entertainment are moving in opposite directions.
- Here are the 10 hottest meme stocks on Reddit heading into September.
Many of the stock market’s hottest meme stocks have gotten crushed since mid-August after a sudden resurgence, but it’s too soon to say that the selling will scare away retail traders.
Non-professional investors continue to talk up their favorite stocks in online forums like Reddit’s r/wallstreetbets. The practice gained mainstream popularity about 18 months ago as retail investors successfully sent shares of GameStop (GME) to astronomical levels.
The meme stock movement lost steam during a broad stock market selloff this year, but roared back to life after Bed Bath & Beyond (BBBY)’s stock caught fire. Despite a concerning earnings report, shares of the beaten-down retailer soared nearly 500% to a high of $30 on August 17.
Much of that momentum is now gone. Bed Bath & Beyond’s stock has lost two-thirds of its value in less than two weeks after Ryan Cohen, the GameStop chairman whose enthusiasm for the company sent it spiking in the first place, changed his tune and sold all of his shares of BBBY. However, shares managed to log an 11.5% gain in the past week, including a 5.9% increase on Friday.
Reddit traders can’t say they weren’t warned about Bed Bath & Beyond’s implosion. A few days after BBBY started spiking Steve Sosnick, the chief strategist at Interactive Brokers, told Insider that the surge was a sign of speculative excess and that the money-burning retailer’s valuation made “little sense.”
In an interview with Insider on Friday afternoon, Sosnick said that while it appeared to him as if Cohen followed the rules with his sale of Bed Bath & Beyond, it “certainly did have a bad look.”
While Sosnick said he would expect those who lost money trading shares of the troubled retailer to feel burned by Cohen and quit chasing meme stocks altogether, he added that Reddit traders tend to be an unpredictable bunch.
“The bottom line is this: meme stocks are driven by greed,” Sosnick told Insider. “People will always be greedy, especially when people have made money using the strategy of buying meme stocks.”
In other words, just when it seems like GameStop or Bed Bath & Beyond are down and out, they could always revive.
“Meme stocks are like the guy in the horror movie who keeps coming back from the dead,” Sosnick said.
Top meme stocks right now
Meme stocks are still generating buzz on Reddit, but it’s anyone’s guess as to what the next hot name will be. That’s why it may be worthwhile for traders to peruse stocks highlighted by HypeEquity, a website that pulls data from investing-related Reddit forums.
There are two top 10 lists of names on HypeEquity’s homepage: hyped stocks, or those with the most mentions and high trading volumes; and trending stocks, which are the fastest risers on Reddit. Five meme stocks appear on both lists at the moment, including the Invesco QQQ Trust Series 1 (QQQ) — an exchange-traded fund (ETF).
One notable name that’s further down the list is AMC Entertainment (AMC). Like GameStop, AMC is a long-time meme stock that has fully embraced retail traders. In fact, on Tuesday the movie theater company introduced the AMC Entertainment Holding Preferred Equity Units (APE). Conveniently, its ticker is the /wallstreetbets crowd’s nickname for itself. AMC’s stock shed 19% on the week after the move amidst worries that one of its peers could declare bankruptcy.
Below is a list of the top 10 stocks on Reddit from HypeEquity’s hyped stocks and trending stocks pages as of Friday afternoon. Along with each stock is its ticker and the following data from HypeEquity: category (hyped or trending), social mentions, and social volume percent change.