Don’t bet on this meme stock trading frenzy being like the last
It is a very different market to the early days of 2021, as traders hoping for a quick profit from GameStop have found. And analysts say it is increasingly fragile.
Speculators hoping for a replay of 2021’s meme stock trading frenzy will be sorely disappointed. Back then, it took nine months for the meme stock excitement to subside. This time, it’s taken only days for the frenzy around GameStop to dissolve.
Last month, the meme stock jumped 490 per cent in eight days before handing back most of the gain over the next three days. On Monday, GameStop opened at $US40.19, nearly twice its previous close of $US23, before closing the day at $US28. On Tuesday, it lost a further 5.4 per cent to finish at $US26.50.
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Karen Maley writes on banking and finance, specialising in financial services, private equity and investment banking. Karen is based in Sydney. Connect with Karen on Twitter. Email Karen at karen.maley@afr.com
