Since last year, meme stocks have hit the headlines several times due to their massive, short squeeze-driven returns. Individual investors’ discussion on forums like Reddit’s WallStreetBets (WSB) and their collective bets against short-selling hedge funds have helped these stocks skyrocket in price. Video game retailer GameStop Corporation (GME) is a case in point. Despite possessing weak fundamentals, GME experienced an unprecedented surge in price.
However, meme stocks have experienced a sharp decline from their peak on Feb. 9, 2021. According to the Chief Investment Officer of Personal Capital, Craig Birk, “The speculative frenzy, and just betting on stocks with nothing more than the hope that they’re going to keep us going up, has faded away.”
