The meme stock frenzy that took Wall Street by storm in 2021 has calmed down significantly in 2024. So far, the Market action surrounding meme stocks is much more subdued compared to the wild volatility we saw three years ago. Stay tuned to find out why investors are approaching these stocks with more caution this time around.
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Today, meme stocks like GameStop (GME) and AMC Entertainment (AMC) experienced another round of volatility. These stocks surged on Tuesday, reminiscent of the 2021 meme stock frenzy. GameStop closed the day with a 62% increase, while AMC jumped by 30%.
Following some encouragement from Keith Gill, known as Roaring Kitty, other Reddit-favorite stocks like Koss, Tupperware, Virgin Galactic, Hertz, and BlackBerry also saw increased activity.
However, unlike in 2021, Wall Street appears to be driving the current Market trends. Vanda Research noted that the influx of funds into GameStop and AMC is significantly lower than in 2021, indicating less retail trader participation.
Institutional investors are now better prepared to handle volatile situations like this, according to Vanda. Retail investors’ share turnover in GameStop and AMC is relatively low compared to 2021, suggesting a more controlled Market environment.
Unlike the single, coherent narrative that dominated the 2021 meme stock saga, the current Market lacks a similar overarching theme. Recent Market volatility seems to be driven more by news and fundamentals rather than internet forum discussions.
Big names like Coinbase, Carvana, and Palantir are making gains based on earnings and fundamental factors rather than speculative trading. Overall, the Market environment in 2024 appears to be more stable and less prone to extreme fluctuations compared to the events of 2021.
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1. Why is the 2024 meme stock action not as wild as in 2021?
The 2024 meme stock action is tamer so far because investors and regulators are more cautious after the volatility of 2021.
2. Are meme stocks still popular in 2024?
Meme stocks are still popular, but the hype and frenzy around them are not as intense as in 2021.
3. What lessons were learned from the 2021 meme stock saga?
Investors and regulators learned the importance of due diligence, risk management, and understanding the fundamentals of the companies they invest in.
4. Is there a potential for another meme stock frenzy in the future?
There is always a potential for another meme stock frenzy, but investors and regulators are more prepared to handle it now.
5. How can investors navigate the meme stock Market in 2024?
Investors can navigate the meme stock Market by doing their research, diversifying their portfolios, and being mindful of Market trends and risks.
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