Reddit continues to boost ‘meme stocks’ AMC, GameStop, Blackberry, Nokia…
After the Reddit forum r/WallStreetBets caused GameStop's share price to soar, a number of other frequentedly 'shorted' stocks are on the up.
Last week a group of determined and organised private investors caused carnage on Wall Street as they launched a Reddit-fuelled trading frenzy that hit some of the biggest names in finance. The share price of frequently derided stocks like GameStop, AMC and Blackberry sky-rocketed as investors looked to undermine Wall Street.
Money poured into stocks that had been the subject of ‘shorting’ from the traditional big players in finance and investors saw their portfolios soar as they pushed the prices up. At the start of a new week those gains seem to be holding fairly steady, but how did they do it?
Reddit investors upset Wall Street predictions
While there is always a fair amount of fluctuation expected with any publically-listed stock, some are generally agreed to be on a downward trajectory. Video game retailer GameStop was one such stock; a bricks and mortar store struggling as online gaming and the pandemic hit their business.
As such GameStop was one of the most heavily ‘shorted’ stocks out there, essentially meaning that investors were betting that the share price would continue to fall. In total billions of dollars was staked on price dropping, with huge liability if their bet did not pay off.
It was this precarious situation that Reddit users identified and are now exploiting as they have bought up millions of shares in recent weeks. By buying the shares they increase the stock’s price and have secured some pretty unbelievable results in such a short space of time.
Messages were shared on the Reddit forum r/WallStreetBets as investors looked to disrupt the established names on Wall Street. As one point last week, they had caused the stock price of GameStop to soar by more than 14,300%. The share price fell by around 10% on Monday 1 February but for the most part it looks like investors are holding their nerve and the price remains fairly stable for now.
Undervalued ‘meme stocks’ boosted by online investors
As well as GameStop, Reddit users have focused their attention on a number of other unfancied stocks. Struggling companies who have been the subject of Wall Street shorts are getting a surge of investors snapping up their stocks and boosting the price considerably.
These so-called ‘meme stocks’ have found a huge audience online and may well help to turn around the fortunes of other seemingly outdated companies. Alongside GameStop, the likes of AMC Entertainment, Blackberry, Bed Bath & Beyond, Blockbuster and Nokia have all experienced a remarkable renaissance in recent weeks.
Blackberry is faring particularly well and by last Wednesday had recorded a share price increase of over 250% since the new year. In 2020 the mobile phone manufacturer reported losses totalling $794 million, but could be revived by the hordes of ‘meme stock’ investors. On Monday Blackberry’s share price was up once again, this time by roughly 5%.
In a statement released after the share price rocketed, Blackberry admitted that they are unsure why they have seen a surge of investment. The statement says the company has made "no material change in its business or affairs that has not been publicly disclosed that would account for the recent increase in the market price or trading volume."