So-called meme stocks are falling out favor with investors as prices tumble and interest in them wanes.
Purchases of meme stocks, which include GameStop, AMC, Bed Bath & Beyond and others, fell sharply last week, according to data from Vanda Research.
Purchases of meme stocks tumbled to $360 million in value, down from a peak of $963 million that was notched the week of June 8, with Vanda Research analysts saying that retail investors are “falling out of love with meme stocks.”
The stock prices of some of the companies, which have become favorites among many amateur investors who trade tips over the Reddit forum WallStreetBets, reflect the declining interest.
A basket of 37 of retail traders’ favorite stocks that’s tracked by Bloomberg is down nearly 20 percent from its peak on June 8 as investors look for safer bets.
Still, some stocks that have captured the attention of the Reddit-inspired crowd continued to see an increase in retail investor interest last week, according to Vanda’s data.
“Space. Retail investors have been eager to buy dips on Virgin Galactic, likely in anticipation of the next test flight on July 11th, when Richard Branson will be joining a crew of five astronauts,” Vanda analysts wrote in a report earlier this week.
Shares of Virgin Galactic have soared in recent weeks after the company received a key license from the Federal Aviation Administration and then announced that Branson, the company’s founder, would be on the Sunday flight, jumping ahead of Jeff Bezos to become the first of the billionaire space tycoons to make it to space.
Shares of Virgin Galactic were down 4 percent Friday, but up more than 42 percent from a month ago. The stock was last seen trading at just over $50 per share.
Vanda Research speculated that the decline in purchases could indicate that the Robinhood-fueled day-trader frenzy that began during the pandemic as stocks rapidly recovered from a crash last March may be losing steam.
Investors also appear to be rotating into more stable tech investments as the stock market cools off, Vanda researchers wrote.
A prime example of a day trader who embraced the past year’s volatility in the stock market is Barstool Sports founder Dave Portnoy, who has often declared that “the stock market only goes up.”
The media mogul, who livestreams many of his trading sessions under the name “Davey Day Trader” vented this week that he’s been losing over $150,000 every day recently and he hasn’t “had a good day in this godforsaken game in a month-and-a-half.”