Investors remember what happened in 2008 all too well. When key players decided to short the housing market, the whole world of finance laughed at them. 

Well, no one is laughing anymore. If that crash wasn’t bad enough, the 19th strain of Coronavirus almost froze the world economy. (Except in e-commerce, of course!) I wish I could say I ate popcorn the whole time… 

The investor who predicted the 2008 financial crisis tweeted that the meme stock market ‘created a unique opportunity.

Who Really Wins from Meme Stocks?

Those retail investors who jumped on the bandwagon received 1000% returns on cinema stock AMC (NASDAQ:AMC). Such moments are pure bliss for those in the market who win, but it’s also an indication of the power of social media to make impactful changes.

Yet, at the end of the day, who gets the most benefit from popular meme stocks?

Meme stocks like AMC Entertainment (NASDAQ:AMC) have become far more than just publicly traded securities. 

They’ve become a massive force of social change. It’s reversing the distribution of wealth, and that’s the scary part for the regulators! It’s not always the little guys that win even in the midst of social movements.

In AMC’s (NASDAQ:AMC) case, it’s the executives who sold insider shares of the popular cinema meme stock.  A group of AMC (NASDAQ:AMC) board members recently sold $9.5 million worth of the stock. They’re able to do this because of the swarms of retail investors trading in smaller amounts and taking AMC (NASDAQ:AMC) to astronomical heights. 

We all know why: It’s in response to the massive short positions qued by hedge funds betting on companies they think will fail. Knowing this, it’s little wonder just why big finance thought these companies would go. 

Trends in brick and mortar retail have been on the decline, yielding a response from the market that was driven home by the big thing on everyone’s minds: The pandemic. 

Yet, the incredible thing is, the predictions of world-class analysts all were proven wrong by a bunch of people on Reddit. One big reason for this whole thing was the stimulus money provided by the government. This drove people to abstain from their usual misgivings. 

It goes to show you that even in today’s hyper-complex information superstructure, there is room for the mercurial thing that is the human spirit to swoop in and completely unravel everything. It mirrors a similar set of events when people get together to save a dying restaurant in their community. 

If it wasn’t for the meme stock phenomenon, it’s likely that AMC Entertainment would be in a much worse position. Memes were this stock’s lifeline, and now it’s up to the company what it plans to do with its second chance. 

What will Meme Stock AMC (NASDAQ:AMC) do now?

 The SEC recently announced its investigation into the meme stock phenomenon, and this made share of Reddit’s fan favorite Gamestop Corp (NASDAQ: GME) drop almost 30%. That company is heavily getting into the e-commerce sector, but what about AMC (NASDAQ:AMC)? 

One only needs to look and see when states are re-opening. Seeing the restrictions lift by state could be an excellent indicator for AMC (NASDAQ:AMC) into the future. Hint: Over 40 states now have allowed entertainment facilities to reopen, including movie theatres! Another worthy look are casino stocks as they are in the same realm, though I wonder just why WallStreetBets has not touched those yet. 

The Bottom Line

Don’t risk it all on a meme. If the market today can tell us anything, it’s that it’s important to double down on those investments that are still a sure thing. On top of that, what if the SEC’s vice grips really come down hard on social media companies? One quote by the GOAT says this best. 

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

-Warren Buffet

Featured image: DepositPhotos © abyt10