Smack talk doesn’t pay the bills – and that’s a grim reality for WallStreetBets these days.
After months of crowing about their battlefield victories over hedge fund investors, Jim Cramer, writing in his Real Money column recently, notes the meme investor set has lost its luster after a recent record of poor investment calls.
Worse, the meme crowd has broken the cardinal rule of stock-picking game – They’re causing lots of people to lose money.
Cramer writes: “Just when we started hearing about the meme culture and how powerful it was the darned thing peaked, in part because the purveyors on WallStreetBets just became too vile in their tone -- particularly the most misogynist writing I have ever seen -- and in part because they are beginning to lose a lot of people a lot of money.”
The damage isn’t significant yet, but it could by mid-July, Cramer said.
Read more on Real Money about the stocks Cramer thinks will really power higher as the economy reopens, including Apple (AAPL) - Get Apple Inc. (AAPL) Report and Ford (F) - Get Ford Motor Company Report.
In the past two weeks on the Reddit site we have seen recommendations that make even the worst Wall Street firms look like a collection of Warren Buffett’s. There was that outrageously weak recommendation of Wendy's (WEN) - Get Wendy's Company Report, a truly awful suggestion to buy Corsair (CRSR) - Get Corsair Gaming, Inc. Report right into a giant mound of insider selling that looked like they were just waiting for the memesters, and a top tick in Cleveland-Cliffs (CLF) - Get Cleveland-Cliffs Inc Report that demonstrated how the writers have not one bit of knowledge of how steel works specifically or cyclicals in general.
Add to the list other losing calls like Blackberry (BB) - Get BlackBerry Limited Report and Bed Bath & Beyond (BBBY) - Get Bed Bath & Beyond Inc. Report, and it’s become increasingly clear that Team Meme is on the ropes, with backers more than ready to throw in the towel, Cramer notes.
WallStreetBets is left with AMC Entertainment (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report (down more than 10% last week) and GameStop (GME) - Get GameStop Corp. Class A Report (down nearly 2% last week) as their only two winners, and they have proven to have no capabilities beyond these two stocks in creating wealth for people, Cramer said.
Cramer adds that even Team Meme’s two winners face an uphill slog. AMC CEO Adam Aron is running out of options, and GameStop, despite the social media spin, can’t be anything more than it already is. That’s not a recipe for long-term success.
The takeaway? It’s no shock that the Reddit crowd is radio silent these days, and for good reason, Real Money readers learned.
At the time of publication, Cramer's Action Alerts PLUS Investor Club had a position in F, AAPL.