Reddit Meme Stock Investors Turn to the Bearish ‘Dark Side’

Meme stock investors who are known to be optimistic about their favorite stocks like GameStop and AMC are struggling to maintain their optimism.

Data from Breakout Point, a data analytics company, measured mentions of puts and calls in the WallStreetBets forum on Reddit. She found that mentions of put options (49.2%) were almost equal to those of call options (50.8%) during the period between January 24 and February 2.

“January tested the uptrend of the usual subreddits,” including the Superstonk subreddit thread and AMC, among others, said Ivan Ćosović, founder of Breakout Point.

“Many meme traders have also started exploring what wallstreetbets and other subreddits might call the dark side – i.e. short selling or going down.”

Known for phrases like #HODL (wait for my life) and #ApesNotLeaving (retail investors sometimes refer to themselves as monkeys in a “stronger together” homage to Planet of the Apes), the group displays different colors compared to one year ago .

As of February 10, GameStop and AMC were down 16.24% and 30.37% respectively in 2022, although both still posted gains of over 100% over the past 52 weeks.

Meme stocks and retail investors have kept traditional investors on their toes as their attempts to induce a short squeeze in positions held by hedge funds last year caught them in the mainstream. Established investment firms have been keeping a closer eye on stock trends and general sentiment among this cohort of younger investors.

READ Hedge funds scour Reddit a year after GameStop: ‘This is the tip of the generational change iceberg’

Markets have tended to decline this year. Ćosovic said Financial News retail investors have shown themselves to be flexible and pragmatic.

“Many retail investors might look at popular long-term stock charts, see how far stocks are now from all-time highs, and realize that there is a lot of opportunity on the dark, short side. still has a lot of die-hard fans of AMC and the like, but they’re not the majority in retail anymore,” he said.

The increased downtrend of some retail investors signals more diverse viewpoints in a group that, from the outside, could so far appear monolithic.

However, retail investors who post on social media still have a positive outlook for many stocks. Of the top 10 stocks discussed last week on WallStreetBets, only one, Peloton, was considered to have an overall negative outlook.

The company’s co-founder and CEO, John Foley, recently stepped down as the company cut 2,800 jobs. The exercise equipment company’s stock has skyrockets in recent days after Amazon and Nike reportedly expressed interest in acquiring the company.

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Robert D. Coleman