Today is Wednesday, March 23, 2022.
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Meme Stocks Are Back: AMC and GameStop Jump
Retail investors doubled down on meme stocks Tuesday, suggesting that the meme stock revolution of 2021 is still alive and well.
Numbers: Shares of AMC (NYSE: AMC) jumped 15.02% on Tuesday, GameStop (NYSE: GME) jumped 30.86%, Express (NYSE: EXPR) went up 9.73%, and Koss (Nasdaq: KOSS) went up 29.48%.
Background: In January 2021, a group of users on the platform Reddit teamed up to create a short squeeze against hedge fund giants that bet against stocks such as AMC and GameStop. During this time, several of these so-called meme stocks increased. But many meme stocks later decreased as investors switched to more conventional stocks.
Catalyst: The reason for yesterday's sudden surge in meme stocks isn’t clear. Both AMC and GameStop have reported questionable financial news in recent weeks (AMC bought a gold mine and GameStop had mixed earnings). Short interest is slow compared to last year’s activity. The number of times GameStop has been mentioned on the WallStreetBets subreddit jumped from 115 to 400 yesterday, according to Seeking Alpha. Ryan Cohen, GameStop’s Chairman, bought another 100,000 shares on Tuesday.
Big Picture: One potential reason behind Tuesday’s surge is the overall risky economic environment. Stocks that are speculative in nature usually perform well in these environments.
Final Thoughts: Tuesday’s surge may have been great for the meme stocks, but without a clear catalyst, it is probably not wise for investors to keep betting on meme stocks.
Notable Earnings Today: Evgo (Nasdaq: EVGO), Phunware (Nasdaq: PHUN), Winnebago Industries (NYSE: WGO), KB Home (NYSE: KBH), General Mills (NYSE: GIS), Trip.com (Nasdaq: TCOM), Fortuna Silver Mines (NYSE: FSM), JinkoSolar Holding (NYSE: JKS), ReneSola (NYSE: SOL), Cintas (Nasdaq: CTAS), Ollie's Bargain Outlet Holdings (Nasdaq: OLLI), Hyzon Motors (Nasdaq: HYZN), Traeger (NYSE: COOK), CLEAR Secure (NYSE: YOU), Sientra (Nasdaq: SIEN), Tencent Holdings (OTCMKTS: TCEHY), Ra Medical Systems (NYSEAMERICAN: RMED), Agrify (Nasdaq: AGFY), Oxford Industries (NYSE: OXM), Aspira Women's Health (Nasdaq: AWH), Cresco Labs (OTCMKTS: CRBLF), First Watch Restaurant Group (Nasdaq: FWRG), Steelcase (NYSE: SCS).
Notable IPOs Today: N/A.
Notable Equity Crowdfunding Campaigns Ending Today: Rap Plug (StartEngine), iNitrile (StartEngine), iMorph Smart Health Technologies (Wefunder), Xoca (Wefunder), MarkSetBot (StartEngine).
Notable Economic Events Today: New Home Sales (10:00 a.m. ET), Crude Oil Inventories (10:30 a.m. ET).
Adobe’s Record Revenue Is Not Enough
Shares of Adobe (Nasdaq: ADBE), dropped 2.67% in after-hours trading on Tuesday after the software company posted mixed earnings.
Financials: Adobe reported earnings of $3.37 per share, which was slightly better than expected, and revenue of $4.26 billion, which was better than expected and a record.
The Good: The company’s digital media segment increased revenue by 9%. Document cloud revenue jumped 17%.
The Bad: Adobe’s guidance of $4.34 billion for the current quarter was below estimates.
Final Thoughts: Adobe’s stock price is down 26% in the last six months.
What Happened to Beyond Meat?
After emerging on the scene a few years ago, plant-based meat producer Beyond Meat (Nasdaq: BYND) has been in a bad place lately
Numbers: Shares of Beyond Meat are down over 54% in the past 12 months.
Bad Earnings: Revenue and sales both declined in Beyond Meat’s most recent earnings report, which was in February. The company lost $62 million in the quarter.
Bad Economics: Higher manufacturing and logistics costs have cut into Beyond Meat’s bottom line.
Final Thoughts: Beyond Meat might seem like a good stock to buy the dip, but the company needs to turn things around.
Trends to Watch
Another One: Workers at a Seattle Starbucks vote to unionize, hoping to send a signal of change to the food-service industry (The Seattle Times)
High-End: Maserati Wants To Beat Porsche To The Electric Compact SUV Punch (Jalopnik)
Bullish: Bitcoin bulls take aim at $45K while some analysts warn of possible correction (Cointelegraph)
Dancing With the Cars: Dancing Musk hands drivers first Teslas from new German gigafactory (Reuters)
Anything Can Happen: The housing market enters uncharted waters (Fortune)
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