The meme stock frenzy is back, but is it already too late to join the party? Roundhill Investments has resurrected its Meme Stock ETF (MEME), aiming to give everyday investors a slice of the action in this buzzy—yet notoriously volatile—corner of the market. But here's where it gets controversial: could this relaunch be a sign that the meme stock craze is peaking once again?
This isn't Roundhill's first rodeo with meme stocks. The firm originally launched the ETF in late 2021, only to shut it down two years later amid flagging investor interest. And this is the part most people miss: the fund's previous run coincided almost perfectly with the market's cyclical peak. From its 2021 launch to its closure in 2023, the Nasdaq Composite tumbled nearly 10%, while meme stock darlings like GameStop and AMC plummeted by 69% and a staggering 96%, respectively. Ouch.
"Meme stocks started as a rebellion but have grown into a revolution," said Dave Mazza, CEO of Roundhill Investments, in a press release. "With MEME, we offer investors a tool to capture that power through an actively managed ETF that can pivot quickly into today's hottest stocks."
But not everyone is convinced. Jonathan Krinsky, BTIG's chief market technician, pointed out the irony of the relaunch, noting that meme stocks were a hallmark of the exuberant 2020-2021 market—a period that ultimately led to a cyclical peak. "The meme fund launching is an indicator of market froth reaching fever pitch," he warned. "This could be another sign of excessive exuberance."
To be fair, the new version of the ETF reflects the evolving nature of meme stocks. While the original craze was driven by Reddit's WallStreetBets and names like GameStop and AMC, today's fund is dominated by stocks like Opendoor Technologies (OPEN), which accounts for nearly 12% of the ETF's weight. Opendoor, a real estate tech company, has seen its shares skyrocket 430% this year amid attention from hedge fund manager Eric Jackson.
Other top holdings include quantum computing stocks like QuantumScape (QS), which makes up over 8% of the fund, and smaller players like Rigetti Computing and Quantum Computing Inc. These sectors have seen massive volatility this year, raising questions about whether the ETF is chasing trends rather than leading them.
The ETF's first day back wasn't exactly a triumph—it fell 1.8% while the S&P 500 and Nasdaq hit all-time highs. So, is this a buying opportunity or a warning sign?
Here’s the million-dollar question: Are meme stocks a legitimate investment strategy, or are they just a speculative bubble waiting to burst? The relaunch of the MEME ETF certainly sparks debate. Some see it as a way to capitalize on retail investor enthusiasm, while others view it as a contrarian indicator of market tops. What do you think? Is this the start of a new meme stock revolution, or is history repeating itself? Let us know in the comments!
