AMC and GameStop have emerged this year among investors active on social media who attempt to rise their prices.
The recent surge in the stocks has been driven by two related developments: a widespread belief among investors that the industry is in trouble and that the stocks of these two chains will likely fall,
and a belief among investors that it’s now possible to make money from the downturn, so they’re buying the stocks to make money when the chains go down.
In the past, when stocks have had a long run, investors have focused on fundamentals, such as profitability, earnings, and cash flow, to decide whether a company is a good investment.
In the case of the video game and movie theater chains, investors are instead looking at the number of people who are buying tickets and the number of people who are watching the films or playing the games.
They are seeing the companies as “meme stocks” because the values that people assign to these companies are more closely aligned with the things that make people laugh and cringe.