The short-lived mania that swept up Krispy Kreme, Inc. (NASDAQ: DNUT) and GoPro, Inc. (NASDAQ: GPRO) as part of the broader meme stock phenomenon appears to have finally run its course. Once propelled by retail investors on social media platforms, both companies’ shares are settling back into more conventional trading ranges, highlighting the inherent volatility of meme-driven rallies and the realities of business fundamentals.
The Rise and Fall of the Meme Stock Wave
In 2021 and 2022, the rise of meme stocks captivated Wall Street and Main Street alike. Driven by coordinated campaigns on platforms like Reddit and X (formerly Twitter), stocks with outsized short interest or nostalgic brand appeal saw explosive, often irrational gains. The meme stock concept wasn’t limited to household names like GameStop or AMC. Companies such as Krispy Kreme and GoPro—each with their own passionate customer base and brand nostalgia—became targets for speculative surges.
For Krispy Kreme, the appeal was simple: doughnuts, brand history, and a widely recognizable product. Shares of (NASDAQ: DNUT) spiked as day traders wagered on a turnaround story, encouraged by rumors, short squeezes, and promises of rapid expansion. GoPro, famous for its action cameras, found itself swept up in a similar frenzy as traders bet on a comeback, despite a history of mixed financial results.
Both stocks experienced periods of extreme volatility, characterized by surging trading volumes and sharp swings in price, often disconnected from their underlying business performance.
Fundamental Challenges Resurface
The aftermath of the meme stock hype has returned focus to the fundamental challenges facing both companies. For Krispy Kreme, the key issues remain margin pressures, competition in the fast-food and quick-service restaurant space, and the ongoing costs associated with expanding its store footprint. Despite flashes of profitability, (NASDAQ: DNUT) has yet to fully convince long-term investors of a sustainable growth strategy, as inflation and changing consumer spending habits weigh on discretionary food purchases.
GoPro, meanwhile, has struggled to translate its strong brand recognition into consistent earnings growth. The action camera pioneer faces an increasingly competitive consumer electronics market, where smartphones often double as high-quality video recorders. (NASDAQ: GPRO) has attempted to diversify through subscription services and content creation platforms, but those initiatives have not fully offset the challenges in its core camera business. Revenue growth has been inconsistent, and margins remain pressured by rising production costs and aggressive competition from international rivals.
Retail Investors Retreat
One of the most notable effects of the meme stock surge was the entry of millions of new retail investors into the market. Platforms like Robinhood (NASDAQ: HOOD) and Webull (NASDAQ: BULL) saw record signups as young and inexperienced traders joined the fray, often focusing on stocks trending on social media rather than on company fundamentals. As the excitement faded, trading volumes in meme stocks like Krispy Kreme and GoPro dwindled, and many retail investors exited their positions, sometimes at significant losses.
This retreat has exposed a harsh reality: while social media can move markets in the short term, enduring stock price performance is still tied to business execution, competitive positioning, and the ability to generate consistent profits.
Wider Lessons for Meme Stocks
The decline in Krispy Kreme and GoPro shares offers broader lessons for investors and companies alike. Volatility driven by online hype can provide dramatic short-term gains, but it also amplifies risk. When the crowd moves on, stocks that are not supported by strong fundamentals often see their gains evaporate just as quickly as they appeared.
Other companies that experienced meme-driven rallies, such as AMC Entertainment Holdings, Inc. (NYSE: AMC) and BlackBerry Limited (NYSE: BB), have also faced a similar return to reality. Their stories reinforce the importance of fundamentals, sustainable business models, and careful analysis over speculative fervor.
Looking Ahead
Both Krispy Kreme and GoPro continue to operate as recognizable brands with loyal customer bases. For (NASDAQ: DNUT), new product launches and international expansion remain possible catalysts. For (NASDAQ: GPRO), innovation in hardware and services could spark renewed interest. However, as the market’s attention shifts away from meme stocks, both companies face the challenge of winning over traditional investors with real results instead of viral buzz.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions. Stock prices and market conditions can fluctuate rapidly, and past performance is not indicative of future results.
