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GameStop Stopped? ‘Meme Stock’ Trading Shows Signs Of Decline

   DailyWire.com
GameStop video game store in Middletown, DE, on July 26, 2019.
JIM WATSON/AFP via Getty Images

Americans’ interest in “meme stocks” may be dwindling.

Earlier this year, traders communicating via online social networks collectively agreed to purchase stock in GameStop, AMC Entertainment, and cryptocurrencies such as Dogecoin. However, recent search engine data reveals a declining public interest among amateur stock trading.

Axios reports:

One factor that turns a stock into a meme stock is that it attracts the attention of new traders who are committed to trading with hoards of buyers.

These new traders tend to be novice traders, and they seek information like novices at anything else: they do Google searches for basic terms. However, Google Trends data shows searches for basic terms like “investing” and “buy stocks” have fallen to levels not seen in over a year.

Searches for the two terms skyrocketed in January and February; however, they have since fallen considerably.

“To our eyes, the data here says that the surge in US retail investor interest in investing is entirely over,” wrote DataTrek Research co-founder Nicholas Colas, as quoted by Axios. “Every craze needs new adherents (i.e., not just the same crowd) to keep it relevant, and the Google chart shows those are in increasingly short supply.”

The meme stock phenomenon worried federal regulators, who claimed that the collective decision to purchase assets constituted market manipulation.

“U.S. Securities and Exchange Commission investigators are combing social media and message board posts for signs that fraud played a role in dizzying stock swings for GameStop Corp., AMC Entertainment Holdings Inc., and other companies,” Bloomberg reported in February. “The scrutiny is being done in tandem with a review of trading data to assess whether such posts were part of a manipulative effort to drive up share prices, said the people, who requested anonymity because the review isn’t public. The regulator is specifically on the hunt for misinformation meant to improperly tilt the market.”

Despite regulators’ concerns, several business moguls were enthused by the small-time investors’ efforts.

“I got to say I LOVE LOVE what is going on with #wallstreetbets,” tweeted Dallas Mavericks owner Mark Cuban. “All of those years of High Frequency Traders front running retail traders, now speed and density of information and retail trading is giving the little guy an edge.”

“Old days where a hedge fund manager could quietly short a stock, then publish negative research and take a bullhorn to it in the media are over,” tweeted Canadian entrepreneur Kevin O’Leary, referring to the investors who lost billions after betting heavily against GameStop. “They now run the risk that the power of the crowd will turn on them and squeeze their heads like a teenage pimple. I’m good with it!”

SpaceX and Tesla CEO Elon Musk — who has publicly endorsed Dogecoin — also told traders to give “no respect” to “shorty apologists.”

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