Meme Stocks Are Doomed (in the Long Run)

During the first half of 2021, meme stocks like GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC) took the financial world by storm. Individual investors piled into shares of a handful of companies -- particularly beaten-down, heavily shorted stocks -- quickly making huge gains. As the stock prices soared, many of these traders used social media platforms to celebrate and to urge others to continue buying.

Over the past year, though, meme stocks have lost much of their luster. Indeed, meme stocks' best days are probably behind them. In the long run, they simply cannot escape the underlying companies' poor performance.

The surge in meme stocks last year was surprising, but it wasn't unprecedented. There have been many such stock market "bubbles" over time. However, these bubbles pop sooner or later.

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Source Fool.com