It’s hard to believe it’s been five years since the GameStop short squeeze, which introduced the masses to the notion of a “meme stock”. Speculators, coordinated via Reddit’s cult Wall Street Bets forum, bet against hedge funds which were in turn betting against a dying computer games retail chain. They bought massive quantities of its stock; the price surged; the hedge funds teetered on the brink.

GameStop was the biggest of the meme stocks, but it was far from the last. A lively ecosystem of hedge-fund terrorizers remains encamped on the edges of Wall Street. Occasionally, they launch an attack of a scale that ripples through the mainstream. So it has proved with this week’s raid on Beyond Meat.

Beyond Meat (BYND) fits the classic profile for a meme stock. It’s a company with a public profile, as well as a stretched balance sheet that has made it the target for hedge-fund shorting. But it has also had a recent spike of good news — more distribution in Walmart — that allows for the meme to have a news peg. And it has a principal instigator: a wealthy Russian speculator, Dimitri Semenikhin, who has campaigned vigorously to marshal his fellow Redditors to buy more and more of an outwardly moribund company. So far, the stock has shot up to 10 times its value, squeezing the shorters, who will now have to buy more shares at the new higher price to cover potential losses.

But while GameStop had a natural drama, the sense that the squeeze could lead to a pop forcing some form of insolvency upon hedge funds (one fund closed a year later), this time there is more of a feeling of business as usual. After all, the meme stock market is just another market now. In brokerages on Wall Street and at Canary Wharf, analysts access AI-enhanced reports of the chatter on Reddit and other forums. They scan for plans of attack, and cross-correlate with price movements. If something moves, they might simply jump on the same bandwagon, or hedge the hedge on their positions elsewhere.

Equally, those looking to go long on a meme stock are locked in internal competition with other speculators — to hype their own stocks to the top of r/wallstreetbets, and then to get out before they are left holding the bag.

Given that meme stocks have a limited relationship to underlying value, it is hard to make a case for why one company represents “value”. So many different stocks are being hyped as meme-worthy that it is difficult to get any one stock sufficiently juiced to achieve lift-off. Trading funds such as MEME ETF, managed by Roundhill Investments, were launched during 2021 to capitalize on the craze. But MEME closed in 2023, as the craze cooled. Others have followed.

In the end, meme-buyers can only truly win if the stock redeems its new value. That can happen. For instance, GameStop managed to use the extra cash from a share issue to pivot towards crypto and tech, and it is now reasonably profitable. Beyond Meat could issue more shares and feed the cash into its flagging balance sheet. But by the time a share has grown to 10 times its original value, it’s likely that someone will be left holding the bag. At some point, another delirious round of hot potato begins; and no one can say they weren’t warned.

The joy of GameStop was that it was a blindsiding event. Today, there is a bracket in the algorithm for what might be called anthropological volatility. At the level of markets, the meme hordes are already inside the castle. They are part of a bigger ecosystem of amateur speculators, most of whom will end up as schlubs exiting the casino, their pockets bare.

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Gavin Haynes is a journalist and former editor-at-large at Vice.

@gavhaynes

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