When it comes to meme stocks and fundamentals, Wedbush Securities’ Michael Pachter either really gets it, or really, really, really doesn’t.

I do not see how these guys ever get to 5% operating profit, ever…. I read the tweets just like you guys do. I see the gif from "Ted" where the teddy bear is smoking a bong. And I go, are they gonna sell cannabis? You know, I see the McDonald's soft serve ice cream. And I go, are they gonna sell ice cream? I see the pets.com sock puppet. Are they gonna sell pet-- pet supplies? I don't know what they plan.

I personally think Ryan Cohen is a goofball. I think Elon Musk is a goofball. And they have fun on Twitter. God bless them. That's what Twitter is for. But I think retail investors are trying to read into something. And I'm not sure there's anything there yet.

Not having fun? Why, it’s our old friend Gabe Plotkin, and lots of his peers besides.

Melvin, the highest-profile casualty of this year’s meme stock rally, lost another 4 per cent last month, people familiar with its performance said.

That takes the fund’s losses this year to about 44.7 per cent…. Hedge fund losses from betting against five popular meme stocks — GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health — total about $6bn since the start of May, according to the data firm Ortex Analytics. Peter Hillerberg, Ortex’s co-founder, said funds had recently reduced their short positions in meme stocks but that short interest remained “at very high levels”….

Others that have lost money include Light Street Capital, set up by Glen Kacher, a so-called Tiger Cub…. Its flagship fund lost a further 3 per cent in May and is now down 20.1 per cent this year…. The fund’s losses in the first quarter were predominantly driven by losses on shorting….

Those losses may have been the result of bad shorts on bad jokes, but the rallies? They’ve got a new source of fuel.

The data suggests that investors like hedge funds aren’t crowding into trades betting on the prices of meme stocks falling.

Analysts say what is likely driving the market more this time around are call options…. Instead of trapping bearish investors, rising call options activity pushes market makers such as banks to buy the stock to hedge their positions…. Investors like hedge funds could be buying certain stocks to try to trigger this phenomenon, which is known as a gamma squeeze….

Anyway, there may be nothing fundamental at all behind certain stocks 2,230% surges (because, we mean, could there really ever be such a thing?), but the money those surges allow certain companies to raise to pay down their debt, etc., is very, very real.

Analysts at S&P Global Ratings say [AMC Entertainment] is less likely to default after it took advantage of the meme-stock rally to raise cash in equity markets.

US hedge funds Melvin Capital and Light Street suffer further losses [FT]
Meme Stocks’ Latest Frenzy Isn’t About a Short Squeeze [WSJ]
AMC Just Got a Credit Upgrade. Being a Meme Stock Is Paying Off. [Barron’s]
Ryan Cohen, Elon Musk are goofballs: GME Analyst [Yahoo! Finance]

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