(Bloomberg). — As traders shift away from more risky assets during the last weeks of 2011, losses are increasing for the so-called meme stock basket. 

Bloomberg tracked 37 retail trading favourites, extending losses to 6% by 11:50 AM in New York. This was as global selling pressure increased. As the index drops to its lowest point in seven months, it has lost almost 25% of its value within the last three weeks.

Risky assets and high-flying tech companies have been under pressure since worries surrounding the omicron coronavirus strain began to bubble and as traders attempt to gauge the Federal Reserve’s next moves. This volatility is not new. There have been large rallies and quick selloffs of meme stocks.

“For SPACs and meme stocks, my sense is FOMO was a big driver,” said Mike Bailey, director of research at FBB Capital Partners. “Now reality is sinking in and investor sentiment is shifting to fear and downside risk, rather than greed and upside potential.”

Blank-check firms and those they manage to make it public have felt the pain. The IPOX SPAC Index (a balance of 50 SPACs & De-Spacs) fell 1.7% Monday, bringing the total losses to 9.3% over the previous three weeks.

Dip-Buying

GameStop Corp (NYSE:). AMC Entertainment and AMC Holdings Inc. are the largest drags on this group, both of which were first identified in November. The stock is down 40% each in the past 3 weeks. Express Inc., Newegg Commerce Inc. are both up around 40%. Bed Bath & Beyond Inc (NASDAQ:). |

Grapevine-based GameStop, Texas, is now down 21% from Wednesday. The company reported a larger-than-expected third-quarter loss and investors were not provided with details about its turnaround. AMC Entertainment is being sold off alongside its reopening stock and the sale of shares by key executives. 

Retail traders on Fidelity’s platform rushed to buy shares of AMC Entertainment’s 18% dip and GameStop’s 14% drop on Monday. The pair were among the five most bought stocks by Fidelity’s customers with buy orders far outpacing sell orders.

While there has been volatility in the market and some pain recently, meme stock have shown remarkable gains. AMC Entertainment is up almost 1,000% this year and GameStop shares have rallied 640% — outperforming the group’s 44% rise.

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