Musk’s ‘Baby Shark’ Tweet, Reddit Meme Stocks Redux & AMC Beach Banner Drive Market Frenzy – You Should Play It Cool
Here we go again: one Elon Musk “Baby Shark” tweet, one new AMC Reddit thread and one old-fashioned AMC stock banner flying over Miami beaches later and the market is in a frenzy.
These constant, abrupt and seemingly out of the blue outside influences that make already volatile markets rattle in an instant, can be difficult to navigate for retail investors.
Here’s what happened:
Last night, in response to a South Park tweet about “meme battles,” Musk replied “Baby shark crushes all! More views than humans,” accompanied with a link to the viral YouTube song “Baby Shark.”
Since the post went live, Samsung Publishing’s stock, a major shareholder in the tune’s producer, SmartStudy, surged as much as 10% to 49,000 won ($44) in South Korea, CNN reports.
Musk, of course, is known for moving markets with a single tweet, be it about Doge or Bitcoin.
As for AMC, which was at the center of the market frenzy at the beginning of the year, seems to be going for a redux: At the time of writing, the stock at $58 is up 83% so far today.
The frenzy triggered several trading halts Wednesday, an event that happens often when a stock becomes too volatile. Barron’s reports that the stock was up 90% earlier in the day, something that “doesn’t happen all that often — even in so-called meme stocks — and AMC has been talking about raising money to make acquisitions. No announcements have been forthcoming,” Barron’s says.
In a not-so bizarre twist of events, Robinhood issued a statement saying it had not crashed, tweeting “speculation that Robinhood has halted trading in $AMC is not accurate. Earlier today, the NYSE implemented a volatility trading pause of $AMC.”
Indeed, two weeks ago, following several crypto exchanges technical debacles Wednesday, Coinbase’s Chief Product Officer Surojit Chatterjee, had to offere a mea culpa saying in a tweet that the company “experienced unprecedented surge in trading volumes.”
Because of a massive Bitcoin selloff due to the price of the crypto crashing, several crypto exchanges including Coinbase, Binance, Gemini and Kraken had technical issues.
“Yesterday was a crazy day! We experienced unprecedented surge in trading volumes. My sincere personal apologies to every customer who faced challenges due to unreliability of our site/apps. We’re doing everything we can to make our system robust and be ready for the next time,” Chatterjee tweeted on May 22.
And last but not least, some old fashion ad strategy could potentially be at play here: a plane carrying a banner that read “AMC We Love the Stock” flew along the Miami beaches over the weekend, according to FOX Business’s Charlie Gasparino, who witnessed the event and tweeted about it.
Experts reiterate warnings against gut reactions to these market swings: “I never would have believed it, but the recklessness of a segment of retail investors appears to have no bounds in this market,” Whitney Tilson of Empire Financial Research wrote in a note Wednesday, according to Barron’s. “This type of short-term rally is to be expected, and for stocks like these, this is an opportunity to add to a short or put position because it’s clearly a dead-cat bounce.”
More From GOBankingRates