Meme Stocks Plummet as Hype Fades: Beyond Meat and Opendoor Lose Steam
Latest Meme-Stock Favorites Fade from Favor
The latest stars of the meme-stock trade have lost steam, with Beyond Meat and Opendoor Technologies experiencing significant volatility in recent days after a brief burst of enthusiasm. As bullish retail investors continued to propel these stocks upward, their momentum has fizzled out, and they’re down sharply from their recent highs.
Beyond Meat Loses Momentum
Beyond Meat, which has been on the decline since its October surge, has fared worse than Opendoor Technologies in terms of losses. Despite gaining 16% on Friday to close at $1.39, the stock is down a substantial 82% from its October high of $7.69. This significant drop can be attributed to its inability to maintain momentum, as well as negative announcements affecting investor sentiment.
Opendoor Faces Fresh Volatility After Earnings
In contrast, Opendoor Technologies saw some volatility after its earnings report on Thursday and into Friday’s session, with the stock plummeting 12% in five days. Although both companies became meme stocks due to investors’ reactions to bullish theses shared by influential individuals, their declines can be partially attributed to negative announcements.
Similar Patterns Emerging
The two companies experienced similar patterns, where their stock prices surged significantly after a retail investor with deep pockets announced a big bet on them. For instance, Dimitri Semenikhin’s analysis of Beyond Meat’s growth potential posted on Reddit led to an almost 1,300% rally in just four days. However, this momentum proved unsustainable, and shares have since fallen by over 39% in the past month.
Declines Can Be Attributed to Several Factors
The declines of these meme stocks can be attributed to several factors, including negative announcements affecting investor sentiment. Beyond Meat’s decision to delay its Q3 earnings report due to a need to recalculate an impairment charge had a negative impact on its stock price. Similarly, Opendoor’s earnings results and cautious guidance from management discouraged bullish retail traders.
Investors Hold Out Hope for Future Revival
Despite these developments, some investors remain optimistic about the future performance of these companies. For instance, Eric Jackson, the hedge fund manager who initially shared his bullish thesis on Opendoor Technologies, remains confident that housing market conditions will shift in favor of the company in the coming year. However, economists have also cautioned that a housing market revival may not be imminent due to constrained affordability.
Uncertainty Surrounds Beyond Meat’s Future
Beyond Meat’s future remains uncertain as the company prepares to report earnings on November 11 and allow shareholders to vote on key measures that could impact share prices. As investors wait for clarity on its future prospects, the stock continues to face downward pressure due to its inability to regain momentum.
Conclusion
The phenomenon of meme stocks has been a significant talking point in recent times, with Beyond Meat and Opendoor Technologies being some of the latest favorites among retail investors. However, as these stocks have lost steam, their prices have taken a hit, down sharply from their recent highs. While some investors remain optimistic about the future prospects of these companies, the present situation indicates that momentum has indeed fizzled out.
