Meme mania appears to be far from over. Indeed, when looking at the recent rallies seen in GameStop (NYSE:GME), it appears speculators still have reason to bet on GME stock, especially at these depressed levels.
Today’s 10%-plus rise in GME stock is the latest double-digit gain for the most-watched meme stock in the market. Shares of other high-profile speculative momentum plays have moved higher in recent days, as investigations around naked short selling proliferate for many beaten-up meme names.
Let’s dive into whether this recent near-term rally will continue.
Is Now the Time to Buy GME Stock Once Again?
Most investors remember the incredible move GME stock made in early 2021. This is a stock that went parabolic on a short squeeze and sustained an incredible valuation for months before deteriorating back toward its pre-squeeze levels.
Accordingly, newfound enthusiasm around GameStop and other meme-stock favorites is creating buzz we haven’t seen in a couple of years. As we’ve found out in the past, anything is possible when it comes to meme stocks. Therefore, we can’t rule out another run for these stocks from here. Of course, we’ve also seen that valuations matter, with 2022 providing the slap in the face many investors probably needed when it came to the fundamentals of these beaten-down names.
We’ll see what ultimately comes of these investigations into naked short selling. Plenty of allegations surfaced during the GME selloff, highlighting accusations that shares were sold short that couldn’t have been confirmed to exist. Whether GameStop or any of its meme peers will be able to prove these allegations is unclear. However, this saber rattling is entertaining and extremely profitable for traders right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.