After GameStop, Krispy Kreme? The “same stocks” are back in Wall Street

Why were Krispy Kreme and Gopro’s actions suddenly flew? Consequently, It is certainly not because of their financial results. Meanwhile, but rather because of the frenzy of Internet users on social networks. Similarly, The phenomenon of meme stocks – “Meste actions” with irrational volatility – seems back to Wall Street.

“All thoroughly on Krispy Kreme!” Diabetes is temporary, but eternal profits. Meanwhile, $ Dnut, “wrote a surfer on the Reddit platform a few days ago. In addition, “The spacecraft is ready to take off,” said another, increasing half a dozen emoticons on fire on fire.

The R/Wallstreetbets forum. Moreover, popularized during the pandemic, now brings together 19 million subscribers and is among the most important communities of Reddit. In addition, With jokes. Consequently, memes (imagined content with humorous flavor) and illustrations of stock markets leaving in orbit, Internet users share their most recent after gamestop, krispy kreme? “same investments there every day and make bets on the next good shots to do.

Among their latest whims: revive the course of business action in stock market difficulties. Therefore, Since the beginning of July, the value of the Gopro’s action has appreciated 78 %; That of Krispy Kreme, by 19 %. Consequently, By way of comparison. In addition, the S&P 500 index, based on the largest American companies listed on the stock market, increased by 3 % over the same period.

Since her recent advertising campaign with actress Sydney Sweeney. In addition, the American Eagle clothing brand has also benefited from the exaltation of these investors. The action of the company climbed 15 % over the same period.

“This is called meme stocks “Explains Marius after gamestop, krispy kreme? “same Zoican. professor of finance at the University of Calgary and specialist in questions at the crossroads of technologies and investment, in an interview with Duty. “These are actions with high volatility and a significant volume of exchange. Except that there is nothing fundamental behind their stock market performance. This is caused by a buzz on social networks. »»

After gamestop, krispy kreme? "same – After gamestop, krispy kreme? "same

Risky behavior – After gamestop, krispy kreme? "same

The more famous example is that of the flambée of the Gamestop course in January 2021. The video game and electronic equipment retailer saw the course of action explode more than 1600 % in just a few days. Keith Gill. an investor bordering on the forties and better known as “Roaring Kitty”, had then prompted Internet users to take revenge on the open sellers – investors who are lowering the course of an action.

As at the time, small investors were ready to take risks in the after gamestop, krispy kreme? “same hope of pocket the jackpot. “In a way, it’s a bit of the same phenomenon as during the pandemic that we see at the moment. Except that the intensity is not the same. It’s not as strong today, ”says Professor Zoican.

After a steep fall last April, the stock markets left again. Exalted and put in confidence by this recovery, some investors are now looking for buying opportunities at all costs.

But the methods of those who speculate on memes stocks are the antipodes of what investment professionals recommend. Rather than favoring the medium or long term, these investors are looking for instant gains. And instead of diversifying their investments, they put all their eggs in the same basket. A handle is certainly winning it, but others – those who buy and resell too late – lose everything.

These applications have an interest in that you spend as much time as possible. often come back to do a lot of transactions

Speculation game

The phenomenon of meme stocks No doubt was exacerbated by the arrival of online brokerage platforms without commission, such as Robinhood in the United States or Wealthsimple in Canada, Pointes Marius Zoican. “They made the investment easier, at hand. And speculation too, by the band. »»

According to the finance professor, we have been witnessing for several years in the playing of investment. In other words, some platforms use the game codes so as to attract and retain their users.

Last year, Robinhood also had to pay a fine of US $ 7.5 million following a prosecution of the financial regulator of the Massachusetts State.

The company was criticized after gamestop, krispy kreme? “same for having violated the securities laws using certain playful features. such as revealing confetti rains after stock market transactions. “These applications have an interest in that you spend as much time as possible. often come back to do a lot of transactions,” says Zoican. They bet on “our emotional biases”. like the fear of missing something – the famous fear of missing out (Fomo, of its English acronym).

At the end of May. the International Organization of Value Committees has also warned of ludification strategies, which notably encourage investors to make risky choices.

“You have to question themselves: if I am pushed to make a purchase. is it really in my interest or in the one who pushes me to do it?” Says Professor Zoican.

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