5 Rebounding Meme Stocks to Buy in August

4. GameStop Corp. (NYSE:GME)

Number of Hedge Fund Holders: 18 

Percentage Increase in Share Price Over Past Month as of August 10: 24% 

GameStop Corp. (NYSE:GME) is a Texas-based retailer of entertainment and video game products. On July 20, news platform CoinDesk reported that the NFT marketplace of the video game firm was outpacing the volume of transactions of the NFT market of crypto giant Coinbase. Per the platform, the NFT Marketplace had done over 5,000 ETH in trading volume and $7.2 million in value since the launch on July 11. The marketplace is benefiting from the strong brand name of GameStop among retail traders. 

On July 22, Wedbush analyst Michael Pachter maintained an Underperform rating on GameStop Corp. (NYSE:GME) stock and lowered the price target to $7.5 from $30, noting that the shares remain at levels that appear disconnected from the fundamentals. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. (NYSE:GME), with 3.6 million shares worth more than $601 million.  

In its Q1 2022 investor letter, Bronte Capital, an asset management firm, highlighted a few stocks and GameStop Corp. (NYSE:GME) was one of them. Here is what the fund said:

“GameStop Corp. (NYSE:GME) is a retailer of video games on DVD ROM trying hard (and maybe with some success) to reinvent itself as an alternative computer game  distributor. The company raised enough money that bankruptcy is not an immediately likely outcome. (GME would have gone bankrupt except for the willingness of largely retail investors to provide them with much more cash.)

Both have bad financial results. Gamestop’s last financial results were terrible. And both stocks more than doubled very rapidly in March from market caps that were absurd to market caps that are more absurd. We are of course completely aware that they can double again and again after that. Their valuations are absurd but if you double the price they are not twice as absurd. They are just similarly disconnected from reality.

The reason we want to talk about them is that it is indicative of what is going on. GameStop Corp. (NYSE:GME), the most meme of all stocks, announced a possible stock split and the stock, after market that day, traded up 17 percent. We could joke that every child knows that cutting a pizza into more slices yields more pizza. But in this market, not accepting that stock splits add value is a recipe for losing money.”