In 2021, GameStop underwent a transformation in the public imagination. The video game-selling relic of 2000s-era malls suddenly became a very-of-its-time phenomenon: a meme stock, a tool for the internet-enabled hordes to get rich on something stupid through the sheer force of their collective will. (After first rising more than 1,000 percent, the stock moved around violently but never fell back to its 2020 price.) This week, the company has shown that it has not shed its new meme-y reputation. Since Monday, its stock price has more than tripled, causing the company’s market value to eclipse that of Walgreens —a store people actually tend to patronize. The stock-market wildness is not contained just to Gamestop, either. AMC Theaters has seen its stock go to the moon, also for no reason related to its actual ticket sales. Trump Media & Technology Group has doubled over the past month, even as the former president endures some of his deepest humiliations in a New York courtroom. What is going on?
To the crowd at Reddit’s WallStreetBets forum, it’s Meme Season 2.0. They have — for the moment, anyway — taken control of a boring and wayward stock market while Wall Street waits for Jerome Powell, the Federal Reserve chairman, to lower interest rates and make it easier to trade. Is it weird? Yes — super-weird. Probably a big waste of money. But it’s also funny. And the thing about weird, funny money wasters is that, in the business world, they tend to flourish when there’s a lot of optimism about the future. Memes have become an economy — and the economy is booming.
When the meme-stock era got going in early 2021, there was something vaguely populist about the whole thing: You could cast it as a revolt against short sellers, who thought that GameStop in particular was a kind of lame-duck company. The ringleader was Roaring Kitty, the nom de guerre of Keith Gill, a headband-wearing day trader who led the rally into the stock at the time. (Maybe you saw the movie about him, starring Paul Dano).
In some ways, the economy of 2021 bears little little resemblance to today’s. America was awash in cheap money, people were enjoying bloated savings accounts, there was low inflation, the country wasn’t involved in any wars, and pandemic-induced YOLO-ing was at an all-time high. A resurgence of meme-stock trading would seem unlikely in mid-2024 with inflation biting and people persistently pessimistic about the country’s financial standing.
Yet on Sunday, Roaring Kitty (a.k.a. Gill) posted a drawing of a man wearing Blundstones leaning forward in a chair, with an alert expression on his face. The meme crowd took this single image as a sign that they should just go all in on everything. By Monday afternoon, GameStop and AMC had both doubled in value. Gill then posted some clips that were less subtle: “Come hang! Let’s go out with a bang!” was the song playing in one, preceding Alec Baldwin’s immortal sales speech in Glengarry Glen Ross.
Of course, the last meme stock roller-coaster ride ended on a steep slope down and most people lost their money. Some commentators saw the WallStreetBets crowd as thumbing their noses at the the powers that be, who were supposedly keeping them from making money. This explanation seems less convincing. The second time around, Gill’s message isn’t so much “Let’s get rich” as “Let’s have fun again, even if it costs us everything.”
The fact that so many people have answered the call shows that Gill has great timing. In retrospect, it’s been an anticlimactic year on Wall Street. The rate cus that everyone expected have been delayed, and reliable moneymakers like Apple and Tesla have been unremarkable at best and money losers at worst. It’s not only that there are just people with a lot of money waiting to invest — though that is obviously true — but that there’s just boredom among a class of investors that has unabashedly turned to the market for entertainment. If people were actually pessimistic about the market, would this really be happening? In a show of complete brazenness, AMC’s CEO, Adam Aron, issued $250 million worth of new stock on Tuesday — the kind of deal that dilutes shares and lowers their price — only for the stock to rally even higher. For all the dour hand-wringing about the economy, Gill knows that many people are willing to burn money for the fun of it, just to see what happens. There couldn’t be a better sign for the economy to come.
