Meme stocks have become a hot topic in the stock market, with investors flocking to these highly volatile and speculative stocks. These stocks refer to those that skyrocket in price and trading volume due to social media buzz. However, investing in these stocks can be risky, as they are often overvalued and not based on strong fundamentals. While some investors have seen success with meme stocks, others caution against putting too much of one's portfolio into these highly unpredictable investments. It's a trend that may not last, and predicting when it will reverse can be a costly guessing game.
The stock price for GameStop saw a massive spike of over 70%, thanks to the return of individual investor and social media icon, Roaring Kitty. The surge, reminiscent of the events in 2021, was caused by a single post by Kitty on social media, which mobilized the meme stock army. The return of Kitty has brought a sense of unpredictability to the market and has sent hedge funds scrambling. Despite posting lower-than-expected fourth-quarter earnings, GameStop shares are still up more than 60% for the year.
The stock market was sent into a frenzy as GameStop shares increased nearly 70 percent, reaching a high of $36 per share. This surge was initiated by social media influencer Keith "Roaring Kitty" Gill, who returned to the platform after being silent for three years. Despite the spotlight on Gill and his employer MassMutual, there have been no legal consequences for their involvement in the meme stock craze. This resurgence of GameStop shares has reignited concerns about social media's influence on the stock market and the potential consequences for companies like GameStop and AMC.