By Bailey Lipschultz
Retail investors stepped back in to lift a handful of beaten down meme stocks after a volatile start of the session for the group in the wake of Bed Bath & Beyond Inc.’s quarterly results.
Individual trader favorites like GameStop Corp. and Express Inc. clawed higher as a basket of so-called meme stocks tracked by Bloomberg rebounded from the worst day since June. The choppy session came even as Bed Bath & Beyond jumped as much as 23% after its adjusted gross margin in the quarter topped the average analyst estimate.
Gains for the Union, New Jersey-based home goods retailer, provided the biggest lift to the group of 37 meme stocks, which climbed 1.4% at 12:55 p.m. in New York. However, the group remains on pace for its seventh-straight weekly decline, having fallen 4.1% to start the year.
Heavily Bought
Individual investors flocked to buy shares of AMC Entertainment Holdings Inc. and GameStop on Thursday, according to Fidelity data. The stocks were among the ten most bought assets on the firm’s platform, with buy orders more than doubling sells.
The interest from individual investors stands out from recent weeks where the group has instead flocked to large technology stocks and market-tracking exchange-traded funds, according to data compiled by Vanda.
The basket of 37 meme stocks tracked by Bloomberg has fallen more than 30% since Nov. 22 and closed at the lowest level since January on Wednesday.
Still, aggregate purchase from retail investors remained solid during the selloff as global markets were whipsawed by the Federal Reserve, though the “buy-the-dip” crowd pushed less money into the market than what has been seen with recent drawdowns, Vanda’s Giacomo Pierantoni said by email.
The preference for buying ETFs like State Street’s SPDR S&P 500 and tech stocks including Advanced Micro Devices Inc. may have been a sign that retail investors are “probably sick of buying the dip” in “highly speculative names that keep trending down” like cannabis stocks and electric vehicle proxies, Pierantoni said.
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