Memes Frenzy Again 😲😳

Recently, market was back with a few meme stocks again, such as DJT, RDDT, ALAB! Today, let's look into the details of some meme stocks.  

As introduction, a meme stock is a share of a company that quickly jumps in price due to the attention of a dedicated online following. Meme stocks usually gain popularity through discussion threads on community forum sites such as Reddit and social media platforms. The first successful meme stock was GME. 

Without their cult followings, meme stocks are not necessarily valuable assets. These online communities, such as the popular Reddit forum WallStreetBets, coordinate buying and selling efforts to influence stock prices. With enough online support, meme stocks can maintain elevated stock prices regardless of the underlying company's worth. Part of the motivation behind the online support for certain meme stocks comes from hedge funds' short positions in those companies.

Classic meme

Let's start with the most classic meme. 

$AMC Entertainment(AMC)$  stock is back on the dilution train. The heavily indebted cinema chain and once-loved meme stock is heading to the market to sell another $250 million worth of shares in order to pay down its strangling debt load obtained during the heights of the covid pandemic. AMC had total debt of $9.1 billion at the end of the fourth calendar quarter of 2023 but $3.7 billion in the more significant net debt ratio once cash on the balance sheet and investments were accounted for. 

As we can see below, the gap down last Friday with a huge volume signified an escape of funds from this stock, with high possibility for the stock to go further lower next week.

AMC daily chart

EV memes

For EV, we have meme like FFIE and RIVN. Both are giving negative returns to its investors.

For FFIE, the stock price has gone from last year's $100 to $0.10, registering a rare -99.9% 1-year return. FFIE is trying to keep the company available on the market and address Nasdaq's non-compliance notice. Yet, its stocks have undergone two stock splits within half a year of each other. This is rarely a good sign. Further, financials are even more alarming. The company is still not generating revenue, with its latest quarterly report recording $551,000 in auto sales.

FFIE daily chart

On the other hand, Rivian stands out as a leader in the EV industry with successful collaborations and potential future deals with major companies like Ford, Amazon, and possibly Apple. As the chart below shows, Rivian shares have had many ups and downs for the past several months. This stock was trading in the $20 range at the start of this year, but it has just about been cut in half. The stock is trading well below the 50-day moving average which is $13.65, and the 200-day moving average which is $18.67. Rivian shares are oversold and could be due for a rebound. Also worth noting is that this stock plunged to around the $10 level in late February and then jumped to about $14 in early March, and now once again is back to the $10 range. If this level around $10 holds, this could be setting the stock up for a potentially very bullish double bottom.

RIVN daily chart

Both stocks are oversold and could be due for a rebound, potentially forming a bullish double bottom. For such reason, I bet bullish for them, hoping a dead cat rebound.

$Faraday Future Intelligent Electric Inc.(FFIE)$  $Rivian Automotive, Inc.(RIVN)$  

Crypto meme

The price of Bitcoin has been climbing since the start of 2024, peaking at over US$70,000 in mid-March, buoyed by United States approval in January of spot Bitcoin ETFs and expectations of a halving in April. Bitcoin halving refers to the process that reduces the supply of new bitcoins about every four years. The idea was to counter inflation by maintaining scarcity. The approval in the US of spot Bitcoin ETFs has led to a more positive view of Bitcoin here, with 39 per cent of all polled saying they have a more favourable view than before the approval. For such, I continue to be bullish for crypto stocks like

$Coinbase Global, Inc.(COIN)$ .

Last but not least, let's finish by RBLX. 

Roblox, a platform that allows users to create and play games, has been closely watched by analysts for signs of growth and user engagement. Events like "The Hunt" are significant as they can potentially drive user activity and retention. The mixed results from this event suggest a varied impact on user engagement, which is reflected in the Perform rating reiterated by Oppenheimer. The company's stock performance and future outlook will continue to be influenced by its ability to host successful events and maintain high levels of user engagement. As Roblox Corp. moves forward, the feedback and insights from developers could play a crucial role in refining the execution of similar events to better meet the expectations of its user base.

RBLX daily chart

By referring to its technical chart above, I am 

$Roblox Corporation(RBLX)$  for the company as its share price stays well below EMA200 critical trendline support for almost 2 weeks. I believe the share price will continue to trend lower until there's some positive stimulus for the company.

Keep in mind

Do keep in mind that risking money in speculative investments can be exhilarating, but it is rarely the path to long-term wealth! 

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