Meme stocks are making media headlines once again as a new movie about the rally of early 2021 called “Dumb Money” hits theaters. Not that meme stocks ever really went away. Troubled companies such as movie theater chain AMC Entertainment (NYSE:AMC) and fitness equipment maker Peloton (NASDAQ:PTON) continue to make headlines on a regular basis. Wall Street traders live in fear about the type of short squeezes that sent many stocks soaring to unsustainable levels in 2021, forcing short sellers to cover their positions. While retail investors tend to hop from stock to stock in terms of their short squeezes, interest in sending beaten-down, heavily shorted stocks to the moon remains strong. Here are three meme stocks that should still be on every investor’s radar this fall.
GameStop (GME)
Two interesting developments are swirling around the shares of video game retailer GameStop (NYSE:GME) — often referred to as the original meme stock. Later this month, we will get the release of the movie “Dumb Money,” about the meme stock rally of early 2021 that saw GameStop’s share price skyrocket. Could the film’s release spark a new rally that takes GME stock to the moon once again? Some GameStop insiders appear to think so.
It has just been reported that insiders at GameStop have been buying the company’s stock recently. Regulatory filings show that Alan Attal and Larry Cheng, two directors at GameStop, bought GME stock in recent weeks. On September 8, Attal paid $266,700 for 15,000 GameStop shares at an average price of $17.78 each. He now owns 562,464 GameStop shares. Cheng also bought GameStop stock in September, paying $105,900 for 6,000 shares at an average price of $17.65. He owns a total of 55,088 shares.
The insider buys come as GameStop’s share price has fallen sharply since the company fired then-CEO Matt Furlong in June of this year and canceled a planned earnings call with analysts and media. Over the past 12 months, GameStop’s stock has declined 37%. The stock is 78% below the peak it reached in January 2021 during the meme stock trading frenzy that took Wall Street by storm.
BlackBerry (BB)
Speaking of interesting developments, there are rumors circulating that meme stock BlackBerry (NYSE:BB) is for sale and an acquisition target. Multiple media reports say private equity firm Veritas Capital is planning to make a takeover offer for the technology company that once made smartphones. Blackberry has since switched gears to become an Internet of Things (IoT) and cybersecurity firm. While no deal has yet been announced, the rumors alone sent BB stock to peak over 25% higher during the last month.
BlackBerry announced earlier this year it was undertaking a strategic review of its business with a view to selling itself. Privately-held Veritas Capital is not the only company rumored to be kicking the tires at BlackBerry. BB has struggled mightily since transitioning from making smartphones to its current ventures. Singled out as a meme stock by retail investors, BB stock has declined nearly 50% over the last five years. The shares now trade over 60% below their 2021 meme frenzy peak.
Carvana (CVNA)
Used car seller Carvana (NYSE:CVNA) has become the hottest meme stock of 2023, with its share price having risen more than 1,000% year-to-date. Shockingly, one analyst recently raised his price target on the stock, telling investors that CVNA stock has more room to run. Wedbush analyst Seth Basham raised his rating on the volatile stock to a Hold equivalent from Sell, giving the shares a new $48 price target — up from $40.
According to Wedbush, Carvana, the fastest-growing online used car dealer in the U.S., has successfully managed to restructure its debt, buying the company some runway, which should help to materially improve its financial performance. CVNA stock has certainly been on a wild ride since it became a meme stock. The shares peaked at $370 in August 2021 before crashing 99% to $3.72 in December 2022. Since then, Carvana has announced an aggressive turnaround plan, and its share price has skyrocketed.
On the date of publication, Joel Baglole did not hold (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.
