Meme Stocks Likely On The Way Out, Analysts Say

Meme stocks, or those which became rampantly trendy with internet day traders, may be on the way out, a report from Bloomberg says, with 37 of them trending lower as of Thursday (July 8).

Those stocks were 2.1 percent down as of 1 p.m., the report says, and this shows the continuing fall from its 20 percent height in late May, which could show a bear market fall coming on.

Prior to this dip, the group of stocks held a 50-day moving average since that late May height, when AMC Entertainment had a surge that enticed investors.

Among the losses are GameStop, which was the flag-bearer of the movement from early this year when retail investors fueled by Reddit spurred it to new heights to combat hedge funds’ bets.

Also, Clover Health, Koss and Naked Brand were among the losses, the report says.

This is all pointing, the news outlet said, to the end of the frenzy of day trading that came about while things were still mostly locked down. According to Goldman Sachs analyst Will Nance, there’s been a 30 percent drop in retail stock trading. This has delivered some hurt to some vocal retail investors, such as Barstool Sports’ Dave Portnoy, who said on his “Davey Day Trader” livestream that he’d been losing over $150,000 every day. The report quotes him saying he had not “had a good day in this godforsaken game in a month-and-a-half.”

The rise of the meme stocks led to attention from regulators, with the Securities and Exchange Commission (SEC) looking for evidence of manipulation.

The agency said it was doing this because of the volatility in the stock market — so it wanted to be sure there was no disruptions or other malfeasance going on.

The SEC had also done a probe into the GameStop rally from January, and had been looking at message boards to see if the traders had been encouraging people to buy that way.