From Krispy Kreme to GoPro, has meme-stock trading frenzy returned?
Often, meme-stock bets are unbound from economic fundamentals, as investors move to support a brand for romantic or ideological reasons. Donald Trump’s Trump Media & Technology Group, home to Truth Social, is valued at more than $5bn on quarterly revenue of about $1m.
The wallstreetbets ethos “has always to some extent been about flaunting and exploiting the ironies, relevance or irrelevance” of the stock market, said Rogozinski, who pointed to Wendy’s, the hamburger chain, as a good example. “Wendy’s has always been a meme that goes back a decade. It brings a smile to my face, because on Reddit there’s always been this thing where they say: ‘Sir, this is a Wendy’s.’
“It’s an inside joke, and I don’t even get where it started. It’s just a meme,” he added. The stock’s fleeting rise – it rallied 10% in two days, but finished the week broadly flat – shows some retail investors do not necessarily care about the typical factors that drive the market, such as tariffs and war in the Middle East. “It’s this ability for us to almost make fun of the financial system.”
Long-term institutional players will always get the last laugh, Rogozinski conceded, because prices will return to normal valuations. “But in the short term there’s lot of money to be had with this volatility, and the fact that stocks are able to move up and down with such ease is but a mere showcase for how the financial system needs a facelift in relevancy.”
Related: Bed Bath & Beyond sees ‘meme-stock’ surge – but is it too little, too late?
While current market conditions do not replicate the low interest rates and retail investor buoyancy of the Covid era, market records and a robust economy have made meme stocks attractive once again for some. “You see all these indications where this is full-blown meme mania,” Brent Kochuba, founder of derivatives-data firm SpotGamma, told Bloomberg.
“The macro economic environment really favors the retail and speculative plays,” agreed Al. “I think were only going to see more speculation and excitement. It’s a good time to tune in, because retail players can react and provide insight faster.”
Days traders are not necessarily bothered by a company’s financial performance, said Rogozinski. “You have this activist, elective investor who is saying, ‘I don’t care what the financial statements look like, I don’t care what the discounted cashflow is, I like the food, I like the video-game store, I like the meme. So dude, you can go back to Excel spreadsheets if you want, but I really like the chicken tenders,’” he said.
There is now a “third component” to investment, beyond supply and demand, he claimed, “which is, ‘dude, I don’t care if you think it’s going to go up or not, or if they have assets or liabilities. I care about this company and I’m going to help it out. I’m going to go buy my jeans from American Eagle.’”
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