Despite the fundamental weakness, meme stocks made headlines last year due to their skyrocketing short-squeeze rallies. Retail investors got together on popular social media forums like Reddit’s WallStreetBets (WSB) to make aggressive bets against hedge funds, causing unprecedented rallies in some fundamentally weak stocks. However, these stocks could not sustain the price levels they reached.
After a pause for a few months, the meme mania has recently returned, leading various struggling stocks to soar considerably. However, these fundamentally weak stocks are expected to soon return to earth from their unsustainable levels amid the uncertain macro environment, resulting in massive losses for retail investors.
