Australia’s retail investors are holding onto ‘meme’ stocks in companies GameStop and AMC Entertainment at higher rates than their international colleagues, according to the latest data from trading platform eToro.
GameStop was the fourth-most held stock by Australian eToro users over the third quarter of 2021, eToro suggests, with AMC Entertainment coming in at #10.
Internationally, GameStop ranked #5 for the quarter, while AMC Entertainment did not appear on the top ten list.
The findings suggest local retail traders are still riding high on the promise of GameStop, the American video game retailer seized upon by social media-driven investors.
After Reddit’s WallStreetBets community targeted the unassuming company for an attempted short squeeze, prices ballooned from less than $25 a share in December to a peak of $472 in late January.
Prices have bounced between roughly $276 and $242 over the past month, after the company reported a larger-than-expected second quarter loss and held off on providing future guidance.
While some analysts believe GameStop’s share price is far from representative of the company’s fundamentals, eToro data suggests Australian investors are still “hodling” on for the ride.
Industry observers believe AMC Entertainment, which operates cinemas across the United States, could face further challenges through the festive period with Hollywood’s blockbuster release schedule yet to recover from the COVID-19 pandemic.
Regardless, the meme dream may still be alive for some Australian traders holding on to shares which have lost nearly half their value since AMC Entertainment’s peak in June.
Notably, shares in BioNano Genomics Inc., another Reddit-fueled share market darling, have vanished from the local top ten list.
The biomedical firm appeared as the #7 most popular stock for Australian eToro users in the second quarter, but may have faded as social media mania targeted new prospects.
Overall, Tesla remains the most-held stock among Australian eToro users, with Apple and Shanghai-based EV company Nio ranking second and third, respectively.
Following GameStop in #4 position, more traditional tech stocks reign. Amazon, Palantir, Alibaba, Microsoft, and Alphabet occupy rankings five through nine.
“Australian investors are clearly passionate about investing in EVs, with Tesla once again dominating the local rankings,” eToro’s Australian market analyst Josh Gilbert said in a statement.
Local bullishness on the manufacturer was bolstered by Tesla’s Q2 earnings report, which “demonstrated vehicle deliveries were up 122 per cent year-over-year, gross margins were continuing to swell and most importantly, guidance was strong for the rest of the year.”
Speaking of the global preference for stocks in tech juggernauts, eToro global markets strategist Ben Laidler said investors believe there’s more room to grow before U.S. interest rate hikes change the status quo.
Big tech’s portfolio dominance suggests that “investors believe interest rate rises will be slow and steady; and, secondly, that they believe there is still plenty of mileage in growth stock earnings,” Laidler said.