CNBC reported on the 13th (local time) that shares of GameStop and AMC Entertainment, representative meme stocks, fell 13.9% and 15.3%, respectively.
Prices of “meme stocks,” which some individual investors (ants) in the U.S. have worked together to push up, have recently plunged. Meme stock refers to stocks that attract individual investors through word of mouth online. AMC’s stock price growth rate this year was close to 1,000%, and Game Stop soared 620%, but it has been on the decline recently.
The monthly decline this month was 30% for GameStop and 31% for AMC, respectively. Both hit their lowest prices since June. Clover Health also fell 14.5% this month, the report showed.
What these stocks have in common is that ants gathered through social media, including the online community Reddit’s debate room “Wall Street Betts,” bought them in groups in the first half of this year, significantly raising prices.
In particular, some say that it is an unprecedented monumental event on Wall Street that ants who protested the short selling of large hedge funds intensively bought game stops, causing enormous losses to short selling forces and even declaring their surrender.
However, the threat of COVID-19 in winter is rising again, with the emergence of new mutant ohmicrons in COVID-19, and as the Federal Reserve (Fed), the U.S. central bank, prepares to speed up monetary tightening to curb inflation, there is also a cold wind in meme stocks.
Analysts say that as risk aversion sentiment strengthens among investors, selling these highly volatile stocks is growing.
Ahead of the U.S. Federal Open Market Committee (FOMC) regular meeting from the 14th to the 15th, the technology stock-oriented NASDAQ index plunged 1.39% on the same day, larger than the Dow Jones 30 Industrial Average (-0.89%) or the Standard & Poor’s 500 Index (-0.91%), which also shows the market’s tendency to avoid risks.
CNBC assessed that the growing selling of meme shares toward the end of the year suggests that investors are losing patience.
GameStop, a video game distributor, declared that it would turn into an e-commerce company after soaring stock prices at the beginning of the year, but has gradually been shunned by investors as it failed to come up with specific plans.
However, despite the recent plunge, the stock price of these stocks is still remarkably high compared to the beginning of the year.
AMC’s stock price growth rate has reached nearly 1,000% this year, and Game Stop has soared 620%.
