The return to social media of Keith Gill, also known as Roaring Kitty, thrust original meme stocks AMC and GameStop back into the spotlight in 2024
It has been an eventful year for meme stocks - one that saw the return of influential trader Keith Gill to social media after a three-year hiatus and a flurry of "Trump trades" as America headed to the polls.
Gill, also known as Roaring Kitty, burst out of obscurity during the 2021 meme-stock frenzy, and his return to social media in May 2024 boosted original meme stocks AMC Entertainment Holdings Inc. $(AMC)$ and GameStop Corp. $(GME)$. The trader also thrust Chewy Inc. $(CHWY)$ into the meme-stock spotlight when he amassed and then dumped a stake in the online retailer of pet products.
Meme-like activity in stocks related to President-elect Donald Trump was also a feature of 2024, with Trump Media & Technology Group Corp. $(DJT)$ and Phunware Inc. $(PHUN)$ both garnering outsize attention around the presidential election.
So what can we expect to see in 2025?
Movie-theater chain AMC had record-breaking attendance over the Thanksgiving holiday, with 8.8 million moviegoers worldwide attending a showing at an AMC theater or its Odeon subsidiary. This marked the busiest Thanksgiving holiday period in the company's history.
The movie-theater chain and original meme-stock darling reported better-than-expected third-quarter results last month and also announced a major investment effort to boost the moviegoing experience at its theaters.
After years of disruption caused by by the COVID-19 pandemic and the Hollywood writers and actors strikes, AMC is looking forward to a much-improved environment in 2025. "Of enormous importance, as we look ahead to the next two years, looking forwards not looking backwards, we believe that the box office will continue on its recent marked rise," said AMC CEO Adam Aron during the conference call to discuss the company's third-quarter results. Major releases set for 2025 include "Avatar: Fire and Ash," "Mission Impossible - The Final Reckoning," "Captain America: Brave New World," "Superman" and "Wicked 2."
AMC's debt-restructuring efforts also deserve attention, according to analyst Eric Wold of B. Riley Securities. In July, AMC conducted a major debt restructuring that extended up to $2.45 billion in debt maturities due in 2026 out to 2029 and beyond.
"That pushes out the runway for them in a number of things," Wold told MarketWatch. "It lets them benefit from what should be a very strong box office in '25 and '26."
Wold also thinks another stock conversion is a possibility for AMC. In 2023, the movie-theater chain used a reverse 1-for-10 split of its common stock and an AMC preferred-equity-unit stock conversion to raise additional equity capital. "I think they will be in a very good position in the coming year," Wold told MarketWatch. "On the latest call they talked about more premium large-format screens [and] they talked about funding that through equity issuances."
He added: "They could lean into those preferred shares again and do another APE transaction."
AMC shares are down 34% in 2024, while shares of fellow original meme stock GameStop are up 67.7%. In June, GameStop featured prominently in Gill's first YouTube livestream in three years. The trader described himself as a "believer" in GameStop and talked about an "overemphasis" on the videogame retailer's legacy business, saying: "They are in the transformation stage." He also said of GameStop Chief Executive Ryan Cohen: "I believe this guy - he might be able to do it." Gill subsequently increased his stake in GameStop.
GameStop shares jumped after the company reported a surprise third-quarter profit earlier this month, despite falling sales. But analyst firm Wedbush thinks that a return to profitability in the company's core business is unlikely.
Chewy is another company with meme-stock credentials, thanks in no small part to Gill. However, Chewy's performance has seen the company challenge the traditional definition of meme stocks, with its fundamentals attracting plenty of positive attention from analysts.
Chewy beat analysts' sales estimates in its third-quarter results earlier this month, and its stock is up 35.3% in 2024. Set against this backdrop, Chewy recently received price-target increases from J.P. Morgan, JMP Securities and Wedbush.
Related: How Chewy's stock is shedding its meme-stock past amid strong execution
Bank of America also lists Chewy among its top 2025 stocks in global e-commerce, and the retailer is BofA's top U.S. small- to midcap Internet e-commerce pick. In a note, BofA analyst Curtis Nagle cited "accelerating topline trends that could lead to significant earnings leverage" and also pointed to the company's strong expense discipline. "Combined with a stabilizing pet industry and a shift to higher gross margin sales at Chewy (advertising & Health), we think there is opportunity for significant earnings growth over the next two years," he wrote.
One of the big unknowns in the meme-stock world is Gill himself, whose cryptic social-media posts have had a big impact on meme stocks in 2024. The trader's most recent post on X was on Dec. 5. That was also his first post on the platform since Sept. 6.
Meanwhile, Trump Media and Phunware could also be in the spotlight again next year, with Donald Trump returning to the White House on Jan. 20. Both stocks soared during the election, and Trump Media is up 102.5% this year, while Phunware is down 5.1%.
On Election Day, Truth Social parent Trump Media reported a narrowing quarterly loss and said it is remediating previously disclosed "material weaknesses" in its internal control over financial reporting. In a statement, Trump Media also said that it is exploring growth opportunities such as potential mergers and acquisitions "with companies that would benefit from Trump Media technology and branding, including in the realm of fintechs."
Mobile-advertising software company Phunware is working on a canvassing technology that it says will give campaigns greater insight into voter sentiment. Phunware's interim CEO, Stephen Chen, recently told MarketWatch that the technology will debut next year. Phunware is also developing a new generative-artificial-intelligence platform. Private beta testing is under way, according to Chen, who said the platform will have a broader release by mid-2025.
Comments