How to find meme stocks like GameStop and AMC: Your complete guide to spotting and profiting from hot stocks on social media and Reddit’s Wall Street Bets

Stonks meme
Meme stocks have been arguably the biggest market trend of 2021.

  • Meme stocks like GameStop and AMC Entertainment have taken the investing world by storm in 2021.
  • Small-time retail traders have banded together in a rebellion against Wall Street hedge funds.
  • Insider regularly interviews experts who share how to spot meme stock surges.
  • Below is a compiled list of stories covering everything you need to know about meme stocks. You can read all about the trend by subscribing to Insider.

Stocks have steadily advanced in 2021 as the economy rebounded from the pandemic, but the S&P 500’s solid gains pale in comparison to those of previously left-for-dead companies like GameStop (GME) and AMC Entertainment (AMC).

Those long-suffering stocks shocked the world by spiking as much as 1,700% and 2,800%, respectively, and ushered in a new era of investing in what are now known as meme stocks.

Meme stocks have no precise definition, but they’re not hard to spot. Common characteristics of these select few stocks include sudden rallies and volatile price swings on unusually high trading volume.

The action is typically driven by members of online forums like Reddit and social media users, who sometimes make and share memes to promote and build momentum around the stock’s rally. But stocks that meet the above criteria can be considered meme stocks without having a big online following.

Below is a comprehensive breakdown of Insider’s coverage of the meme stock movement and how investors can profit from it.

Top meme stocks now

Retail investors are always searching for stocks to send “to the moon.” Below are some of the hottest names that social media users are buzzing about during the week of August 23.

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How to trade meme stocks

Trading meme stocks isn’t as simple as it sounds. It takes hours to surf through Reddit forums for the next trendy stock, and it requires a huge, carefully coordinated online movement to send individual stocks spiking.

But sending meme stocks to the moon isn’t rocket science either. Insider has interviewed investing pros who have simple strategies for spotting meme stocks, as well as the creator of a site that saves investors time by scanning Reddit forums for the next big meme stock.

Just as important as finding the next hot meme stock is avoiding common trading mistakes. An analyst who’s covered GameStop since 2002 told Insider how to spot short squeezes and avoid getting burned, and a strategist shared how to avoid landmines in a rapidly evolving investing landscape that now includes meme stocks.

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How the meme stock movement began

GameStop is widely considered to be the first meme stock. The long-beleaguered video-game retailer suffered for years as its sales were cannibalized by e-commerce giants like Amazon and by the video-game industry’s shift to online games. Its C-suite became a revolving door for executives: Three different CEOs led the firm in 2018 alone.

GameStop’s miraculous surge began in January 2021 after Ryan Cohen, the founder of online pet-store company Chewy, joined the company’s board and inspired optimism among investors. Cohen could spearhead GameStop’s e-commerce efforts and help the company get back on track, investors believed.

But the main reason behind GameStop’s monumental move was a massive short squeeze.

Convinced the video-game seller was destined for the same fate as Blockbuster, a handful of Wall Street pros bet against the stock through shorting, a process where investors borrow shares of a company they think will decline, then sell them immediately in hopes of buying them back at a cheaper price before returning them and booking a profit.

Small-time traders flipped the script on hedge funds by driving the price of the heavily shorted shares up, forcing the bears to close their positions by buying back borrowed shares, which perpetuated the cycle. The stock then rose to the moon, and the rest is history.

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What to know about the dangers of meme stocks

If getting rich off meme stocks were easy, thousands of Redditors would be millionaires.

The harsh reality of markets is that for every buyer, there must be a seller. For every trader that nailed the bottom of a stock, someone else sold at the worst possible time – and every time an investor sells at the peak, someone must have bought ahead of the crash. Some unlucky soul bought GameStop shares at its all-time high of $483.

By definition, investing in meme stocks is incredibly risky, and poorly-timed trades can lead to massive losses. Critics have said the practice creates “false markets” and reflects how the market is broken.

Michael Burry, the hedge fund mogul who predicted the housing market crash, told Barron’s via email earlier this summer that a meme stock crash could come soon.

“I believe the retail crowd is fully invested in this theme, and Wall Street has jumped on the coattails,” Burry said. “We’re running out of new money available to jump on the bandwagon.”

Read more:

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AMC Entertainment falls 14% as increasing short bets test a key technical support level

AMC Entertainment
  • AMC Entertainment fell as much as 14% on Wednesday as the meme-stock frenzy begins to cool down.
  • The stock is testing a key support level at its 50-day moving average in Wednesday trades.
  • Short bets against the movie theater chain increased 6% over the past week, according to S3 Partners.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of AMC Entertainment dropped as much as 14% on Wednesday as retail traders begin to capitulate on the meme-stock frenzy and short bets against the theater chain increase.

The stock tested a key support level on Wednesday, as it traded around its 50-day moving average at $37.28. At time of publication, AMC was trading below the key support level at $35.27.

Moving averages are a lagging trend-following indicator that technical analysts use to smooth out price movements and help identify the direction of the current trend in place.

Traders view the the 50-day moving average, which is the average daily closing price of a stock over its previous 50 trading sessions, as a short-term moving average that often represents areas of support or resistance for a stock.

If AMC manages to decisively hold the 50-day moving average as support, then a rise back to its June peak of about $70 could be in order.

But a single trading day above its 50-day moving average is no sure-signal that AMC stock will continue to trend higher, as declining momentum indicators like the Relative Strength Index suggest fewer buyers are stepping in to support the stock than in previous weeks and months.

Another moving average traders will likely have their eye on if AMC falls below its 50-day is the longer-term 200-day moving average. The rising 200-day average is currently near the $14 level, representing potential downside of 60% from current levels.

But a stock’s decline below its 50-day moving average does not mean a swift decline back to its 200-day moving average is in order. One sign traders look for to generate a buy or sell signal is the crossover between the shorter 50-day and longer 200-day moving averages.

A buy signal is flashed when the short-term moving average crosses above the longer-term moving average, as happened for AMC in February. Using this method, a sell signal for AMC would not be generated unless the 200-day moving average crossed above the 50-day moving average.

As AMC tests its key 50-day moving average support level, short bets against the company are increasing, according to data from S3 partners. Over the past week, short bets increased 6% to 5 million shares, worth nearly $200 million.

While AMC short-sellers are down more than $3 billion in 2021 on a mark-to-market basis, that could soon reverse if AMC breaks below its 50-day moving average and trends towards its 200-day moving average.

Technical analysis chart of AMC
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AMC jumps 10% as the Reddit favorite reports the most customers in a weekend since reopening

Vin Diesel driving a car in "Fast and Furious 9."
Vin Diesel in “Fast and Furious 9.”

  • AMC Entertainment jumped as much as 10% on Monday after it reported strong traffic at its theaters over the weekend.
  • The company said more than 2 million customers visited its movie theaters over the weekend.
  • The new ‘Fast and Furious’ movie installment helped drive a post-pandemic box office record.
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Meme stock and Reddit favorite AMC Entertainment soared on Monday, surging as much as 10% following a strong weekend at the movies.

Driven by hot weather and the opening of “Fast and Furious 9,” AMC saw more than 2 million guests visit its theaters over the weekend, representing a post-pandemic record for the company.

“Fast and Furious 9” also broke records, with the movie generating $70 million in ticket sales over the weekend. That’s the biggest opening weekend for a movie since 2019’s Star Wars: The Rise of Skywalker.

According to AMC, six of its movie theater locations represented the top 10 busiest theaters in the US. And an additional 500,000 people visited AMC’s international locations over the weekend, according to the company.

“The combination of widespread vaccination and the release once again of blockbuster movies is proving to be the magic formula for the return of moviegoing,” AMC CEO Adam Aron said.

Shares of AMC are up more than 2,600% year-to-date and have cost short-sellers billions in losses.

Despite the near-record stock price and an improving outlook for movie ticket sales, some investors remain unconvinced that AMC is worth its current market valuation of nearly $30 billion. Short interest as a percentage of AMC’s entire share float still stands at just below 20%, according to data from ShortSqueeze.

AMC Entertainment stock chart
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Meme-stock momentum has withered after retail traders drove a 3-week rally in AMC, BlackBerry, and other Reddit favorites

AMC stock
Igor Golovniov/SOPA Images/LightRocket via Getty Images

  • Meme stocks are losing steam after a three-week rally that mirrored the frenzy of activity seen earlier this year.
  • Some of the most popular stocks have dropped 17% in the past week, Vanda Research said.
  • “Retail investors will rush to the exit unless there’s an immediate rally,” the analysts said.
  • See more stories on Insider’s business page.

Meme-stock momentum is fading after a three-week rally that mirrored the GameStop frenzy earlier this year.

The latest meme-stock bubble has lasted for three weeks, said Vanda Research senior strategist Ben Onatibia and analyst Giacomo Pierantoniwhich, which is about the same timeframe as earlier this year when an army of Reddit day traders poured into GameStop to push a short squeeze and drove other favorites higher as well.

Now, momentum for the basket of companies is “deteriorating,” as a basket of the most popular stocks has fallen 17% in the past week, the analysts said. On top of that, open interest for meme-stock call options has dropped in the past couple days as traders cash in before the expiration. And that’s likely to continue.

“Given the amount of risk embedded in these investments, we think retail investors will rush to the exit unless there’s an immediate rally,” the analysts said in the Wednesday note.

Vanda Research Meme Stock pullback
Source: Bloomberg, VandaTrack

AMC Entertainment led the latest round of meme-stock madness. After the company’s once-largest shareholder dumped almost all of its remaining shares, retail traders poured into the stock for weeks, driving it to all-time highs. Shares of the movie-theater chain are now trading around $60.

Other retail-trader favorites, like BlackBerry, GameStop, Clover Health, and Nokia, followed AMC’s footsteps amid the rally. Meanwhile, new names like Beyond Meat, Wendy’s, WorkHorse, ContextLogic, and Clean Energy Fuels, also joined the basket.

The trend of meme stocks began earlier this year with retail traders wanting to squeeze short-sellers on nostalgic stocks like GameStop and AMC Entertainment. But now, Vanda said, “squeezing highly shorted stocks is quickly falling out of fashion.”

The fizzling out of the meme-stock craze has coincided with a rally in cryptocurrencies. Matt Maley, chief market strategist for Miller Tabak + Co., told Insider previously that meme stocks in the past have taken off when cryptocurrencies have corrected, and vice versa. He said as the Federal Reserve considers pulling back on quantitative easing, there will be less liquidity in the markets.

Meme stocks and other “high-flying liquidity-fueled assets are going to have a tougher time rallying to the same degree that they once did,” he said.

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Wall Street brokers are reportedly limiting short bets against meme stocks by hedge funds

AMC Entertainment
  • Major Wall Street brokers are tightening rules over who can bet against meme stocks that are popular with retail traders, according to Bloomberg.
  • Goldman Sachs, Bank of America, Citigroup, and Jefferies Financial are among the firms that have adjusted risk controls.
  • Jefferies Prime Brokerage will no longer offer custody on naked options in AMC Entertainment, GameStop, and MicroVision, the report said.
  • See more stories on Insider’s business page.

Some of Wall Street’s largest brokers are quietly tightening rules on who can bet against meme stocks popular among retail traders in an effort to protect themselves against the fallout from sharp price surges and falls, according to a Bloomberg News report.

Firms that have adjusted risk controls at their prime-brokerage operations include Goldman Sachs, Bank of America, Citigroup, and Jefferies Financial Group, the Friday report said, citing people familiar with discussions about internal policy decisions.

With the adjustments, some hedge funds and other institutional investors now face higher collateral requirements or are limited from shorting certain stocks.

Jefferies Prime Brokerage will no longer offer custody on naked options in AMC Entertainment, GameStop, and MicroVision, the firm told clients in a memo seen by Bloomberg News. Naked options allow investors to short a stock without owning the underlying securities. Jefferies will not permit short sales of those securities and other stocks may be added to its list.

The changes come during a new wave of rallies among so-called meme stocks including AMC GameStop as retail investors on social media sites such as Reddit’s Wall Streets Bets forum band together to force short squeezes on hedge funds that betting shares of the companies will fall. AMC has been the key focus of the latest rally, similar to GameStop’s role during a trending frenzy in January.

It’s not unusual for banks to make risk-control adjustments as market conditions change, the report noted.

A number of brokerages have been looking over their risk controls after some large prime brokers in March were forced to liquidate at a discount the multibillion-dollar portfolio of Bill Hwang’s Archegos Capital Management. The family office collapsed after making wrong-way bets on media and technology companies. Bank of America and Citigroup were not hurt by the Archegos matter, Bloomberg said.

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A stock analyst says Mudrick Capital’s AMC purchase and quick sale shows Wall Street insiders are ‘preying on the naivete’ of meme-stock traders

AMC Entertainment
  • Mudrick Capital’s purchase and then quick sale of AMC stock shows retail investors aren’t the only ones making money during the latest meme stock trading frenzy, said David Trainer, CEO of investment research firm New Constructs.
  • Trainer called the hedge fund’s quick profit an example of “institutions dunking on retail investors.”
  • He acknowledged that there are also retail investors profiting from the sale, but says the trading is risky and investors should take profits now.
  • See more stories on Insider’s business page.

Mudrick Capital’s purchase and subsequent quick sale of AMC stock shows retail investors aren’t the only ones making money during the latest meme stock trading frenzy, said David Trainer, CEO of investment research firm New Constructs.

Mudrick Capital sold all its stock in AMC Entertainment Holdings Inc. for a profit on Tuesday, the same day the movie theater chain disclosed the hedge fund had bought $230 million worth of shares, Bloomberg reported. The firm then went as far as to call AMC’s stock overvalued in the aftermath. The move didn’t sit well with Trainer.

“A blatant example of institutions dunking on retail investors comes from the Mudrick Capital trade,” he told Insider. “They bought 8.5 million shares from AMC and turned around and sold it directly to the public for a quick profit.”

The meme trading frenzy isn’t an example of retail investors “beating” institutions as there are still institutions profiting from this as well. While there are a handful of retail investors getting rich, institutions like Mudrick as well as brokers who collect fees from the trading frenzy are also drawing in money, Trainer said.

“Wall Street insiders are preying on the naivete of retail meme stock traders,” Trainer said in an email.

His message for retail investors who’ve gotten in on the AMC trade?

“Take the gains you’ve made right now to the bank, don’t try to time the market.”

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AMC warns investors to prepare to lose all of their money if they buy the stock amid epic rally

Trader NYSE
A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2020.

  • Even AMC thinks its stock is overvalued, according to a filing made with the SEC on Thursday.
  • The company warned investors that they should only invest in their stock if they are prepared to incur massive losses.
  • “We caution you against investing in our Class A common stock,” AMC said in the filing.
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AMC Entertainment’s announcement Thursday that it could sell up to 11.6 million shares came with an unprecedented warning to its prospective investors: be prepared to lose most, if not all of your investment in our company.

The movie-theater chain has experienced a dizzying rally in recent weeks, briefly soaring to more than $70 and generating a year-to-date return of as much as 3,325% as retail traders piled into the name. At a $30 billion valuation on Wednesday, AMC was worth more than Best Buy.

AMC CEO Adam Aron is taking advantage of the meteoric rise, having raised hundreds of millions of dollars already this week. The company sold $230 million worth of shares to hedge fund Mudrick Capital on Tuesday, and hundreds of millions more can flow onto the company’s balance sheet depending on the pricing of its 11.6 million share offering proposal.

But AMC is aware that its stock is likely overvalued, given that the pandemic ravaged its business and even prior to the pandemic, the company wasn’t profitable.

“We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,” AMC said in a filing made with the SEC on Thursday.

AMC also warned its investors against investing in the company unless they are prepared to lose all of their money.

“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” AMC warned in the filing.

That risk was apparent in early Thursday trades, as the stock plummeted as much as 34% to $41.25.

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AMC short-sellers just lost $2.8 billion in a single day – and they’re now down $4.5 billion in 8 days amid a 500% surge for the stock

AMC Entertainment
  • AMC short-sellers lost $2.8 billion on Wednesday alone as shares skyrocketed as much as 127%
  • They’re now down $4.5 billion in just eight days, since AMC shares began a torrid surge that capped out at more than 500% on Wednesday afternoon.
  • AMC shares have benefited from renewed interest from Reddit day traders seeking to squeeze out short positions.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Short-sellers betting against AMC stock lost $2.8 billion on Wednesday alone as shares skyrocketed as much as 127%. They’re now down $4.5 billion in just eight days, since AMC shares began a torrid surge that capped out at more than 500% on Wednesday afternoon, according to data from analytics firm Ortex.

AMC slid 3% to $60.47 on Thursday as of 9 a.m. in New York.

Short-sellers felt the pain in other meme stocks as well as Reddit day traders banded together to execute squeezes of bearish positions. Shares in home retailer Bed Bath & Beyond rallied 62%, adding up to $681 million in losses, while retail chain GameStop’s stock rose 13%, delivering $414 million in losses, according to Ortex.

It’s activity reminiscent of the GameStop mania that dominated market activity in late January and early February, and the market’s most heavily shorted stocks – including AMC – are once again in focus. Mark-to-market losses from the 10 most-shorted US stocks totaled $4.5 billion just on Wednesday, Ortex data shows.

Yet despite the deep losses, short-sellers appear relatively unperturbed. The percentage of AMC’s free float held short had actually increased to 18% on Wednesday, up from 15.5% a week prior, according to Ortex. Further, data from Bloomberg showed that shorts only slightly pared their positions on Wednesday as AMC’s wild spike was transpiring.

“If you, as an investor, believe the share price will go back to where it was at the beginning of the year, shorting the stock [now] could bring huge profits,” Ortext cofounder Peter Hillerberg told Insider.

He continued: “However, so far, the short bets haven’t paid off, as the upward momentum in AMC has been going for a few days now and seems to only be increasing.”

Read more: Morgan Stanley identifies 28 underappreciated, high-quality stocks to own as the market’s most expensive names are due to continue underperforming

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AMC’s epic 3,325% year-to-date rally now makes it bigger than these 10 well known companies

NYSE trader worried
A trader reacts as he works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 18, 2020.

AMC Entertainment’s monster rally on Wednesday catapulted the movie theater chain to record highs, with its market valuation eclipsing $30 billion.

The stock saw its year-to-date gains surge to as much as 3,325% at the high of the day on Wednesday, as a frenzy for Reddit favorite “meme” stocks was revitalized following the late January surge in heavily shorted stocks like GameStop. The stock is up about 500% over the past week.

Shares of AMC Entertainment surged more than 100% in Wednesday trades, even after hedge fund Mudrick Capital quickly turned around and sold its more than $231 million stake in the company it had bought on Tuesday. But retail demand for shares overpowered the hedge fund sale, and the company is now rewarding its investors with free popcorn this summer when they hit the theaters, as well as exclusive screenings.

The surge in AMC Entertainment highlights its extreme volatility, and not all are convinced that the company can retain its current valuation. One analyst believes the company is only worth $1 per share. The company is not profitable and has been ravaged by the COVID-19 pandemic, which led to closures of its theaters for months.

And the overall outlook for the movie theater business is in a secular decline. Goldman Sachs outlined on Wednesday that shortening theatrical windows and growing alternative distribution of new movies, like streaming, will make it hard for movie theater operators going forward.

But for now, AMC Entertainment’s $30 billion valuation makes it bigger than these 10 well-known companies.

1. Best Buy

Ticker: BBY
Market Cap: $29.2 billion

Best Buy

2. Tyson Foods

Ticker: TSN
Market Cap: $29.2 billion

tyson foods meat plant
Workers leave the Tyson Foods pork processing plant in Logansport, Ind., Thursday, May 7, 2020. The plant was expected to reopen Thursday after closing on April 25 after nearly 900 employees tested positive for the coronavirus.

3. Nokia

Ticker: NOK
Market Cap: $28.7 billion

FILE PHOTO: Visitors gather outside the Nokia booth at the Mobile World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Sergio Perez/File Photo
FILE PHOTO: Visitors gather outside the Nokia booth at the Mobile World Congress in Barcelona

4. ViacomCBS

Ticker: VIAC
Market Cap: $28.2 billion

Paramount Plus

5. Zillow Group

Ticker: ZG
Market Cap: $28.0 billion


6. Okta

Ticker: OKTA
Market Cap: $27.3 billion

Okta Bell

7. Hormel Foods

Ticker: HRL
Market Cap: $26.1 billion

hormel foods logo spam skippy
The company logo for Hormel Foods is displayed on a screen on the floor at the New York Stock Exchange in New York, US, October 9, 2019.

8. Sirius XM Holdings

Ticker: SIRI
Market Cap: $25.5 billion

sirius xm

9. Royal Caribbean

Ticker: RCL
Market Cap: $24.9 billion

Royal Caribbean

10. Dollar Tree

Ticker: DLTR
Market Cap: $23.8 billion

dollar tree
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