FILE - The Truth Social account for former President Donald Trump is seen on a mobile device, Wednesday, March 20, 2024, in New York. Reddit and Trump Media are the first social media companies to begin trading publicly in the last five years. They're also, thanks to the rabid reception among investors, the latest meme stocks. – They're also, thanks to the rabid reception among investors coupled with the companies' fuzzy profit outlooks, the latest meme stocks.
Research firm Similarweb estimates that Truth Social had roughly 5 million monthly visits in February of this year. By comparison, Facebook had 15.2 billion visits, while Reddit had 2 billion. Granted, GameStop had the backing of Ryan Cohen, founder of the e-commerce pet food company Chewy, who investors likely thought could modernize GameStop's business. But a number of investors were individuals who belonged to the Reddit community Wall Street Bets and bought shares in order to “stick it to” to big institutions that had made bets the stock would drop. As the stock took off, even more investors seized the opportunity to buy.
The frenzy surrounding GameStop and AMC eventually died down. GameStop's market value peaked above $20 billion in January 2021; it's now just above $4 billion after Cohen's turnaround has for the most part. AMC's market value has dropped from a high of around $29 billion to about $1.5 billion. While both carry on — GameStop even reported a small profit for the fiscal year ended in January — analysts question their longevity.
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