Just when we started hearing about the meme culture and how powerful it was the darned thing peaked, in part because the purveyors on WallStreetBets just became too vile in their tone -- particularly the most misogynist writing I have EVER seen -- and in part because they are beginning to lose a lot of people a lot of money.
Right now, neither seems to matter. But in a couple of weeks that will no longer be the case.
In the last two weeks on the Reddit site we have seen recommendations that make even the worst Wall Street firms look like a collection of Warren Buffetts. There was that outrageously weak recommendation of Wendy's (WEN) , a truly awful suggestion to buy Corsair (CRSR) right into a giant mound of insider selling that looked like they were just waiting for the memesters, and a top tick in Cleveland-Cliffs (CLF) that demonstrated how the writers have not one bit of knowledge of how steel works specifically or cyclicals in general.
While I agreed with them about Clean Energy Fuels (CLNE) , a company I had on Mad Money last week, I really like it only for speculation until it can start making money. Finally, I tire of the BlackBerry (BB) push like everyone else and I can see where the attempted short busting of Bed Bath & Beyond (BBBY) with a 33% percentage sold short, is intriguing but it is proving to be another loser for them. There could be something there for the longs in the low to mid-20s that makes sense because Mark Tritton, the CEO, is very good at his job, but the meme people know the short position, and demonstrate incredible ignorance when it comes to the company.
Which leaves them, basically, with AMC (AMC) and GameStop (GME) as their only two winners, and they have proven to have no capabilities beyond these two stocks in creating wealth for people. In fact, after Wendy's, where there was no follow-through, Corsair, where the push was met with a huge amount of insider selling, and Cleveland-Cliffs, where the cyclicals had gone out of fashion, although to them a cyclical is probably a washing machine, smart people started realizing the fraudulence of a movement based on looking at short positions and in short, they are killing you with their recommendations.
OK, how about the big two, the only ones that they really are in control of: AMC and GameStop, how are they doing there?
Right now AMC is a $30 billion company with very little hope that it can survive unless it monetizes the meme support, which his exactly what it should do. If the CEO, Adam Aron, sensed how desperate the WallStreetBets people really are after this string of losses he would take advantage of them and really take the company's viability off the table with sales of tens of millions of shares. Then the move could be justified.
The problem the memesters have right now is that Adam really needs them to stay the course and maybe aggressive selling hurts the cause. So he has to do at-the-money selling to get the job done and the WSBers will do the rest.
Everyone in the business, including Adam, knows that right now is a perilous time to be in the movie theatre business. Sure, Adam can take his big market cap and buy up all of those who are desperate and become the number one movie theatre chain by far. Worthy stance. But he must go to the Disney's (DIS) of the world and say, "OK, we need exclusivity for two weeks which you will need when the pandemic ends and everyone will go out." Will Disney bite? Who knows with this CEO.
GameStop's the toughest. Here they need a brilliant plan and while Ryan Cohen has brought in brilliant people, the issue is what is the company going to be? It can't be what it is. No industry insider thinks that is possible. You are simply, once again, betting that they can raise enough money to be something else. Maybe yes, maybe no. We have no insight whatsoever. And they seem to have no desire to give us any.
Let's go to the bottom line here: we can all decide that the memes have all the power. Or we can all decide that Adam Aron and the memes have power with AMC and Ryan Cohen and the memes have power with GME.
But that's it. When they have tried to branch out they have crushed everyone who listened to them. Their power is now down to two stocks.
Good luck to them. They are nothing more than a tough-to-read O'Neill Play -- The Hairy Ape -- not the box office success Planet of the Apes. And they are horrendous stock pickers. Or as we used to say when really bad stock pickers entered the fray: the Iceman Cometh.
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