Meme stock mania is back with a bang. Once more, small investors with a taste for a gamble are piling into unloved ‘meme’ companies whose bombed-out share prices make them seem like the biggest bargain buy of the summer of 2025.
It’s a replay of the craze that gripped the world in the pandemic era of 2021 when the share price of video game store GameStop leapt by 2,500 per cent in a day, turning this hapless business into the iconic meme stock.
These amateur investors, using mobile trading apps, are taking time off from worrying about President Trump’s tariffs. They are giving into FOMO (fear of missing out) to delight in some speculation – and boast about their winnings online. Fortunes are being made overnight, although only the lucky few with immaculate timing are making money.
It’s routine to post a screenshot of your trading account with a comment such as: ‘I’m already up $45,000 – in an about an hour of trading.’
There are claims of six-figure profits scored in a day, thanks to dizzying rises in share prices in companies like property start up OpenDoor Technologies.
One investor was proud to proclaim a huge increase in his holding, saying his initial stake of $104,000 had grown to $290,340 within days. People don’t shout so loudly about their losses, however.
The latest meme stock is clothing company American Eagle which faces challenges. But the brand’s new face is the actress Sydney Sweeney, star of Euphoria and White Lotus, news that sent the previously languishing share price soaring, rewarding those who bought and sold before the price fell back.
As was the case in 2021, a vein of anti-authoritarianism underpins the frenetic trading. The small investor army is mounting a rebellion against Wall Street firms who consider certain stocks are fast heading downwards.
Property start up OpenDoor Technologies is the latest ‘meme’ stock to gain traction with casual investors
The 2021 meme mania which saw GameStop’s shares move from $5 to $400 – but today it stands at just $23
Clothing company American Eagle faces challenges but the brand’s new face is the actress Sydney Sweeney, news that sent the previously languishing share price soaring
Motivated by the desire to ‘stick it to the man’ and – maybe – make a killing, US small investors have poured a record $155billion into the stock market during the first half of this year. They seem to have a renewed appetite for a massive dollop of risk and criticism is mounting that the markets are being ‘gamblified’.
Similar accusations were made in 2021. But observers of the 2025 meme stock phenomenon say this time it’s different, in several ways. For one thing, some investors are asking ChatGPT, the generative artificial intelligence system, for share tips.
In 2021, the WallStreetBets section of the Reddit online forum and X, the platform formerly known as Twitter, were the key sources of recommendations.
They retain this status but have been joined by the StockTwits platform which this week cited American Eagle as the next meme stock darling.
But the resulting 18 per cent advance in American Eagle shares is minor compared with the upward moves in the prices of other companies caught up in the frenzy.
OpenDoor Technologies – which matches buyers and sellers of homes – is yet to turn a profit. Its shares were in the doldrums. But this month they have bounced by 329 percent to $2.
This ascent was spurred by the prediction that the price was heading for $82. This came not from a big Wall Street firm, but from the boss of a small Canadian hedge fund.
The action has heated up further this week with sharp climbs in the shares of other companies like debt-laden doughnut business Krispy Kreme – whose price has advanced by 40 per cent.
The ‘wallstreetbets’ forum on social media site Reddit is where many traders share tips and information on meme stocks
There is a strong element of nostalgia in some of the purchases. Kohl’s had its heyday in the Nineties and Noughties during the childhoods of many of today’s meme stock investors
The action has heated up further this week with sharp climbs in the shares of other companies like debt-laden doughnut business Krispy Kreme – whose price has advanced by 40 per cent
GoPro has jumped by 99 per cent, although this company, which makes cameras for action sports people, has failed to keep pace with technology.
The hype has even spread to Beyond Meat. This loss-making company makes plant-based burgers which have not proved a smash hit. Nevertheless, its shares are 20 per cent higher than a month ago.
Also defying gravity – for a while at least – has been Kohl’s, the US department store chain that’s been hard hit by online shopping.
On Monday Kohl’s share price was $10. On Tuesday it leapt to $19.44. By Wednesday, however, it had slumped to $12. But before the fall, one lucky investor cashed in, making a profit of $850,000. Or so he told Reddit.
Early recruits to the meme stock movement of 2025 are doubtless also gratified by their gains on shares in car rental group Avis. The price is 160 per cent higher than at the start of the year.
For the moment, Avis is the only company that starred in the 2021 buying spree to make another appearance this time around.
As yet, no interest has been shown in the companies that were the main focus of the 2021 meme mania which saw GameStop’s shares move from $5 to $400 – but they now stand at just $23.
AMC, a cinema chain, experienced a similar ascent going from $23 to $261. Today they are $3.
These falls highlight the poor prospects of most of the companies that the meme stock cohort loves the most. The influential analyst Steve Sosnick of Interactive Brokers said that the current wave of share buying did not yet indicate ‘a full-fledged flight-to-crap’.
He added, however, that investors seemed not to be paying much attention to the attributes, such as cash flow, that usually make a company a fit home for your savings.
But building a nest egg for a rainy day or retirement is not the goal of meme stock trading. There is a strong element of nostalgia in some of the purchases. Kohl’s had its heyday in the Nineties and Noughties during the childhoods of many of today’s meme stock investors.
The same longing for the pre-online retailing era seems to have motivated some of the buying of GameStop, a store that was once a familiar sight in America’s suburban shopping malls.
In 2021, these emotions were heightened by the circumstances in which many investors found themselves.
Some were out of work in the wake of Covid and looking back in fondness at the pre-pandemic world. But although jobless, they did have money thanks to the distribution of stimulus ‘stimmy’ cheques from the US government, money which was intended to revive the economy.
Research from Harvard University reveals that about $100billion of the $814billion paid out through ‘stimmy cheques’ was directed into the stock market.
The ‘risk on’ mood among small investors this summer is based on the expectation that US interest rates will ease and that the economy will prosper, once the turmoil stirred up by tariffs recedes.
But it is also being driven by a desire to get the better of the money managers in the big names Wall Street banks, brokerages and hedge funds.
Each of this summer’s meme stocks has been ‘shorted’ by these investors. This means that they have entered into a contract based on the calculation that the company’s share price will decline.
They borrow a parcel of shares, which they sell, aiming to buy them back at a lower valuation. The profits come from the difference between the price at which the shares were sold and that at which they have been bought back, minus the fee to the investor who loaned out the shares.
But if the meme stock army targets the company whose shares are being widely shorted – information on these transactions is widely available – the short sellers can be caught in a painful squeeze. If the share price heads upwards, they are obliged to buy back the shares at a much higher price, turning their hoped-for gains into massive and embarrassing losses.
Is the meme stock army happy about this? You bet.
This article was originally published by a www.dailymail.co.uk . Read the Original article here. .