Investors Pile into Unprofitable Brands as Market Climbs
With Wall Street indexes nearing record highs, a growing number of individual investors are diving into struggling brands in search of overlooked opportunities. This week, doughnut chain Krispy Kreme, camera maker GoPro, and plant-based meat producer Beyond Meat surged in trading volume, signaling a revival of speculative stock enthusiasm often associated with online communities and meme stock culture.
These companies, despite weak fundamentals and unclear paths to profitability, became sudden targets for retail traders seeking quick gains. Their rapid ascents mirrored past speculative cycles, with volatile price movements driven less by earnings and more by viral attention.
Krispy Kreme, GoPro, and Beyond Meat Lead the Charge
Krispy Kreme’s shares spiked sharply earlier this week, extending a rally that began on renewed social media interest. Despite years of declining margins and recent financial caution linked to its McDonald’s partnership, investors appeared undeterred, pushing the stock to double-digit gains before a midweek cool-off.
GoPro, long past its prime as a tech innovator, also drew sudden interest. Its stock soared more than 50% over two days, even though revenue has steadily declined since 2022 and market competition remains fierce. Analysts remain skeptical, expecting only marginal profitability next year.
Meanwhile, Beyond Meat joined the fray, attracting renewed attention from speculative traders. Although the company hasn’t achieved an annual profit since its IPO in 2019 and recently pulled its financial forecast amid demand uncertainty, it posted strong intraday gains earlier in the week.
Momentum Shifts Quickly for Meme Stocks
While some names gained traction, others saw their rallies vanish. Kohl’s, which had surged earlier in the week, tumbled more than 14% on Wednesday. Opendoor Technologies, another retail-fueled favorite, gave up over 20% in a single session, erasing most of its weekly gains. These reversals highlight the high-risk nature of meme stock cycles, where momentum often overrides logic—until it doesn’t.
The trend echoes patterns seen during the original meme stock explosion in 2021, where names like GameStop and AMC soared, only to later settle far below their peaks. Investors chasing these new names face similar volatility risks, as short-term gains can flip to losses with little warning.
FOMO and Social Hype Outweigh Fundamentals
This new wave of trading reinforces a familiar theme: investor behavior in these cases is often driven by fear of missing out (FOMO), social sentiment, and coordinated hype, not financial health. Most of the newly favored companies have faced operational struggles, unclear guidance, or stagnant product lines. Yet their low prices and high short interest make them prime candidates for rapid retail-driven rallies.
As the broader market remains calm, this pocket of speculative trading is a reminder of how quickly investor psychology can diverge from fundamentals. Whether this marks the beginning of a broader trend or just another short-lived rally remains to be seen.