FOMO forced investors into GameStop (GME), AMC Entertainment (AMC), Koss Corp. (KOSS, and even Bed Bath & Beyond (BBBY).
And FOMO left many of them holding the bag. Sure, the rallies were great fun to watch.
After all, it’s not often you see a stock rocket from $17 to $483 because of a chat room.
To us, it made no sense to jump in. At any time, the stock could fall apart.
Not only were stocks like GME severely overbought technically, they were fundamentally overvalued. GME, for example, just saw its net sales fall 3% year over year, thanks to an 11% decrease in the company’s store base. So, once the pump party was over in GME, we weren’t shocked to see it plummet from $483 to a current price of $53.50.
Unfortunately, a good deal of FOMO investors were left holding the bag.
Bed Bath & Beyond fell from a high of $53.90 to $27 in days. Koss Corp. fell from $127.45 to $18.80. Even AMC, which is still struggling, fell from $20.36 to $7.09 so far. Investors were too busy with FOMO to consider AMC just saw Q3 revenue plummeted 91%, or that management has expressed double with the company moving forward.
When it comes to FOMO opportunities, pay attention to what you’re actually buying.
Buying because everyone else is can cost you money, as we’ve seen with Reddit pumps.