7 Meme Stocks Driving Markets & Making a Mark

  


Meme Stocks Talking Points

  • “Meme stocks” are instruments that retail traders support beyond their fundamental underpinnings.
  • Some are nostalgia-triggering companies past their prime. Others capitalize on industry disruptions, such as cryptocurrencies; all, at some point, have shown momentum.
  • Over the next seven pages we’ll dig into some of the more common or popular Meme stocks that have taken the market by storm in early 2021 trade.

7 Meme Stocks Shaking Up Earnings

The retail trading boom that began in 2021 kicked off with a broad focus on tech stocks and the Nasdaq index. These disruptors represented the companies best positioned to benefit from the accelerated digital shift triggered by the pandemic. After dropping from an all-time high just shy of 10,000 at the onset of the pandemic, the Nasdaq catapulted higher. Recently, the index has struck fresh all-time highs around the 14,000 level. But as this resistance has continued to hold, we’ve seen a large portion of the market’s focus shift over into stocks that traditionally wouldn’t get much attention, like GameStop, which we’ll look at in more depth over the coming pages.

NASDAQ 100 INDEX – 1 DAY PRICE CHART (2016 – 2021)

Nasdaq 100 Daily Price Chart

Chart created by Izaac Brook, Source: TradingView

While the Nasdaq continues to perform strongly, much of the speculative activities from the retail trading crowd have navigated away from broad market indexes and have instead focused in on specific stocks. These “meme stocks” have seen considerable momentum in recent months as retail investors bet on their success.

And with cash remaining cheap as inflationary forces have begun to build, investors have shown considerable motivation in deploying their capital in potentially higher-yielding assets, which helps to explain some of the aggressively strong price action shown in markets such as Dogecoin. Over the next seven pages we’re going to look into some of the more popular or common meme stocks that have come into the spotlight as equity prices have continued to launch higher.

Notably, this week saw yet another technical all-time-high for the Nasdaq 100, although the 14,000 level of resistance has continued to hold bulls at bay.

Nasdaq Daily Price Chart

Nasdaq 100 Daily Price Chart

Chart prepared by James Stanley; Nasdaq 100 on Tradingview

The first major meme stock that we’re looking at in this series is also one of the largest and most popular companies on Planet Earth, led by one of the more interesting people that’s looking for ways to get humanity off of that same planet. We’re talking, of course, about Elon Musk and the company that he leads, Tesla.

Tesla had a meteoric rise into the New Year, touching the $900 handle temporarily before pulling back. But more recently, the attention has shifted to the company’s balance sheet and their Bitcoin investment.

Click here to read about Tesla (TSLA): The Market Darling of Tech, ESG and Meme Themes

Tesla (TSLA) Daily Price Chart

Tesla TSLA Daily Price Chart

Chart prepared by James Stanley; Tesla on Tradingview

On the topic of corporate adoption of Bitcoin, there’s another major player that was able to beat Tesla to the punch, and that’s MicroStrategy, led by Michael Saylor who’s often considered to be at the forefront of Bitcoin adoption.

After an early-year flare saw the stock trade up to $1,315, MSTR has pulled back and started to build into a range.

Click here to read about MicroStrategy (MSTR) at the Forefront of Bitcoin, Crypto and Memes

MicroStrategy (MSTR) Daily Price Chart

MicroStrategy MSTR Daily Price Chart

Chart prepared by James Stanley; MSTR on Tradingview

For investors in equity markets looking at more of a pure play in Cryptocurrencies, one interesting option has been the Grayscale Bitcoin Trust (ticker: GBTC). But, recent divergence in share prices from Bitcoin rates may prove troubling, as we looked at in the below article.

Click here to read about Grayscale Bitcoin Trust (GBTC): An Alternative for Bitcoin Exposure?

Grayscale Bitcoin Trust (GBTC) Daily Price Chart

GBTC vs BTC Daily Price Chart

Chart prepared by James Stanley; GBTC on Tradingview

Ok so we’ve looked at a lot of crypto stories so far in this series, but surely there’s a more outlandish example of the meme stock theme? Well, ladies and gentlemen, courtesy of David Einhorn at Greenlight Capital, I present to you Hometown International, a New Jersey based deli with less than $35,000 in revenue over the past two years. The shocking part here is the market cap that it carried, reaching over $100 million following the stock’s 2020 IPO. The stock has been delisted over the past couple of weeks, but this still serves as quite the example of supercharged capital markets during the ‘meme stock’ rally.

Click here to read about Hometown International (HWIN): A NJ Deli That Was Worth Nine Digits

Hometown International (HWIN): Quite the Run on $35k in Sales

HWIN Weekly Price Chart

Chart prepared by James Stanley; HWIN on Tradingview

No discussion about meme stocks is complete without mentioning one of the originators, and that’s GameStop. GameStop took the world by storm in January of this year as a Reddit-fueled short-squeeze threatened to up-end capital markets. With a number of hedge funds sitting heavily short, the fear was that continued losses on the surging price of GameStop would force liquidation in other stocks. And while this happened to a degree, matters seemed to calm before significant damage took place. Since then, GameStop has actually held on to a portion of those gains and continues to show bullish tendencies.

Click here to read about GameStop (GME): The King of Meme Stocks Almost Stopped the Game

GameStop (GME) Daily Price Chart

GameStop (GME) Daily Price Chart

Chart prepared by James Stanley; GameStop (GME) on Tradingview

While GameStop’s business wasn’t exactly on a strong trajectory entering the year, there was still a stronger bullish argument there than that of AMC. The movie theater chain of AMC Entertainment was beset by Covid-driven lockdowns. They were essentially long real estate without the ability to operate their business.

But, similar to GameStop, a large short position caught the attention of WallStreetBets which allowed for a short-squeeze scenario to take place. Also similar to GameStop, AMC has actually held on to some of the gains.

Click here to read about AMC Entertainment (AMC): Theaters Were Closed but Markets Were Not

AMC Entertainment (AMC) Daily Price Chart

AMC Entertainment Daily Price Chart

Chart prepared by James Stanley; AMC on Tradingview

Our last stock in this series is a blast from the past. BlackBerry once dominated the mobile market. But it’s been a long decade since the company had much relevance in the space as Apple and Android-based handsets took the world by storm.

BlackBerry stock got a strong pop at the beginning of the year but, unlike GameStop or AMC looked at above, BlackBerry was unable to hold on to much of that gain. There is still possibility for hope, however, as the company is looking to pivot into a more profitable space.

Click here to read about BlackBerry (BB): A Blast from the Past in the Market’s Crosshairs

BlackBerry Monthly Price Chart

BlackBerry Monthly Price Chart

Chart prepared by James Stanley; BlackBerry (BB) on Tradingview

— written by Izaac Brook, DailyFX Research Intern, James Stanley, Senior Strategist

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