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Avoid These 3 Meme Stocks at All Costs in December -Breaking


© Reuters. The December Meme Stocks You Should Avoid at All Costs

The hype surrounding meme stocks is fueled by social media-driven hype and frothy markets. The Fed’s tightening policy could lead to some profit-taking in the sector. These stocks are vulnerable to extreme volatility. Retail investing has been a concern of the Fed, which calls for more monitoring. Fundamentally weak meme stocks like AMC Entertainment, BlackBerry (NYSE) and ContextLogic are to be avoided. They were popularized by the online community of r/WallStreetBets as well as trading platforms such Robinhood Markets NASDAQ:) and meme stocks, like GameStop Corporation (NYSE :), saw a dramatic rally in the first quarter of this year. Many stocks have seen short-squeezes due to the influence of retail investors. The rally was not sustained for many of these stocks due to their weak fundamentals.

A Florida federal court dismissed a third of a class action lawsuit against HOOD over their role in the GME short squeeze. The case is not closed. Retail investors claim that the company violated securities laws and neglected its duty to customers. Recent Federal Reserve updates have highlighted concerns regarding meme-stock volatility. They also suggested that the financial system should remain unaffected by them.

Given their weak fundamentals, the best stocks to avoid in December are AMC Entertainment Holdings, Inc., BlackBerry Limited, and ContextLogic Inc.

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