Meme stocks are losing that meme stock energy.
This sparked a boom in new retail stock trading accounts on platforms like Robinhood, where traders trade commission-free.But in the past month, GameStop and AMC shares tumbled around 30% and 40%, respectively.
State of play: 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.
What they’re saying: DataTrek Research co-founder Nicholas Colas says this is a “very bad omen” for meme stocks.
“To our eyes, the data here says that the surge in US retail investor interest in investing is entirely over,” Colas writes.”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 bottom line: Crazes never last, though there will continue to be weird reasons stocks may move up or down sharply over short periods of time.