Is the Meme Stock Frenzy Fizzling Out?

 

Three weeks ago, a tweet from Roaring Kitty sent meme stocks soaring, igniting wild speculation across the market. The tweet featured a mysterious image that had everyone guessing: What was Roaring Kitty trying to signal? A hidden message to rally behind stocks like U and YOU? Retail traders couldn't resist jumping in. And just like that, the meme stock frenzy took off—GameStop ($GME) spiked, AMC ($AMC) gained a little, and Unity Software ($U) and Clear Secure ($YOU) both saw some action too.

 

 

Fast forward a few weeks, and things look a little different. GME did experience a decent surge, up around 22% since that tweet, but AMC? It's a different story. AMC has slumped 17.5% since that tweet. While GameStop managed to hold onto some of its gains, AMC got dragged down after the company announced plans to sell up to 50 million shares to boost liquidity. The market didn't take the news well, and the meme-stock momentum quickly fizzled out.

 

 

According to Yahoo Finance, AMC Entertainment currently holds an average rating of "Underperform," with a target price of $4.18—not exactly a strong vote of confidence. On November 6, the company released its latest quarterly earnings data. AMC reported a quarterly loss of $0.04 per share, which was $0.03 better than the consensus estimate of a loss of $0.07 per share. The company’s revenue for the quarter was $1.35 billion, surpassing the expected $1.33 billion. However, compared to the previous year, revenue fell by 4.1%, and the company’s outlook remains bleak, with analysts forecasting a full-year loss of $1.41 per share.

 

But recently, Geode Capital Management raised its stake in AMC by 12.1%, showing some confidence in the stock. Moreover, during the second quarter, several institutional investors and hedge funds, including Bank of New York Mellon Corp, Zurcher Kantonalbank Zurich Cantonalbank, and Principal Financial Group Inc., grew their stake in AMC Entertainment. But is that enough to push it higher? Maybe, maybe not. The company’s latest earnings weren’t exactly inspiring, with a slight dip in revenue and a forecasted loss for the year. On top of that, AMC’s stock has become a bit of a meme-stock cautionary tale. Back in 2021, it was all about short squeezes and speculative fervor, but now? The same speculative energy seems to be fading.

 

 

AMC's struggles are mirrored in other meme stocks, too. Unity (U) had a brief spike, but then it came crashing down, closing almost exactly where it started. Clear Secure (YOU), another meme-stock favorite, followed a similar trajectory—rise, dip, and then back to baseline.

 

 

So, what's going on here? Is the meme stock rally over, or just taking a breather? The wild ride of 2021, driven by retail traders, may be over, but it’s clear that social media still plays a huge role in stoking volatility—just look at the influence Roaring Kitty has had. Could this be a temporary blip in an otherwise fading meme stock movement, or is it the start of a new wave?

 

For me, it feels like a classic case of “rinse and repeat.” The meme-stock cycle has always been about speculation, social media influence, and stock dilution. And while it's fun to watch and occasionally profitable for those who catch the wave at the right time, the long-term prospects of AMC and its meme-stock buddies don’t look too promising. Institutional investors may be in it for the short term, but I wouldn’t bet my retirement fund on these stocks.

 

What do you guys think? Will meme stock mania make a comeback? #MemeStocks