Meme Stocks: Twitter and Reddit Activities as Thermometer of Short-Term Performances

On meme stocks, the Morgan Stanley CEO recently pinpoint-sharply said that “many are taking the wrong lesson from stocks that move 1,200% in a year”. It was a good thing that young people are entering the market and learning about investing. "I don't think it's healthy," he said of the enormous returns seen in a short time by some meme stocks, calling those gains "a recipe for disaster at some point."

But not all of them are fundamentally similar. With such names as Blackberry (BB) and Kodak (KODK) adjoining the group, an investor started feeling the real difference. In just one single day, Monday June 14, shares of movie-theater chain AMC Entertainment Holdings (AMC) skyrocketed again, this time by 15.4%! There is a good chance for the company’s stock to keep this blasphemous rally amid a social-media campaign to push it toward $60 a share.

So-called #AMCDay was the third-most popular trend on Twitter on Monday, and presumably helping give a fresh catalyst to the one of the most popular meme stocks this year.

Shares of AMC have climbed 2,660% so far in 2021 as individual investors on social-media groups like Reddit and Discord have mastered their cohort skills to be able to spur values of almost anything that makes little sense and hurt investors who are betting heavily on fundamentals to finally prevail – along with other meme stocks, such as GameStop Corp. (GME). By comparison, the Dow Jones Industrial Average has added a little more than 12% this year to date, while the S&P 500 index has gained 13.5% and the Nasdaq Composite Index COMP has advanced a little over 10%.

The wild contrarian performance has helped AMC to build a market capitalization approaching $30 billion, and start selling insiders’ stocks onto the market, despite many prominent analysts feeling the company will struggle to match its valuation in earnings or revenue.

#AMCDay appears to be a trend that was launched a month ago but was gaining traction this Monday, perhaps, as “The Quiet Place” became the first movie to surpass $100 million at the U.S. box office in the pandemic era and as bullish individual traders anticipated moviegoing to increase in the lead-up to Marvel franchise tentpole “Black Widow,” which was set to make its debut in early July, even as it is set to simultaneously go live on Disney+ Premier for $29.99. So, activities at #AMCDay may serve as a rough proxy for the stock’s immediate performance, but beware of the “buy-and-hold” approach!