The week is off to a good start for meme stocks, and even ones that don’t really identify as meme stocks.
Shares in popular meme names like GameStop
surged on Monday and Tuesday thanks in large part to deafening chatter among retail investors who are seeing yet another opportunity to pump the prices of their favorite stocks on internet message platforms such as Reddit.
GameStop soared by more than 27.5% Tuesday as retail investors pushed social media volume on the stock up by more than 2,000% at one point, according to data from HypeEquity. Meanwhile AMC closed up more than 20% thanks to a social media spike of more than 600%. The stories were similar for BlackBerry and Clover which both spiked more than 9% on massive social media volume increases.
For GameStop, which closed above $200 a share for the first time since early July, much of the social media chatter revolved around speculation that another squeeze had started on the still-heavily shorted stock.
AMC fans were also thrilled by talk on Reddit predicting that the stock might go past $60 a share by the end of the week, coming close to all-time high of $62.55.
But another stock pumped higher so far this week on retail investor sentiment is Robinhood
the meta-meme no-fee trading app that has a troubled history with retail traders, but which also made it clear last week it does not see itself as a meme stock at all.
Shares in Robinhood popped more than 9% on Tuesday despite no real news, but there was increased social media chatter around the stock on Monday and Tuesday, indicating that retail investors are warming to the company despite Robinhood’s decision to pull the plug on trading in January’s meme stock short squeeze that made GameStop and AMC household ticker symbols in the first place.
That lack of retail support has been evident in Robinhood stock, which spiked by more than 100% in its first few days of trading before giving back more than 40% of those gains by August 4. Robinhood has not tried to court retail investors, choosing instead to go quite the opposite way.
The company’s CFO, Jason Warnick, told CNBC just last week that, “It doesn’t resonate with me to call Robinhood a meme stock.”
While Robinhood has not benefited from the larger August heat wave for meme stocks thanks in part to that residual enmity, it looks to be joining in the party now after retail investors digested the trading platform’s first quarterly earnings and reasoned that there might be more there than meets the eye.
“There’s less idiosyncratic risk than was perceived by the market originally,” said Mizuho analyst Dan Dolev. “The risks are a little overblown and retail investors are seeing that.”
Dolev, who initiated his coverage of the company on Monday with a “Buy” rating, wrote that “Robinhood Is Not a Meme, It’s a Singularity,” and that concerns around the company’s business model fail to take into account that it’s no riskier than its competitors.
The other concern about Robinhood, its reliance on cryptocurrency transactions, is being seen by some on Reddit as a signal that the company’s stock is a cheaper alternative to Coinbase, an actual crypto exchange which trades at almost five times the cost of Robinhood.
As is the case with any major surge in meme stocks, rumors of the MOASS, aka the “Mother of All Short Squeezes”, being near are making the rounds on social media, indicating that support for memes will persist into Wednesday trading.