Death, taxes, and popular stocks of yesteryear soaring for no good reason.
It happens like clockwork in the five years since a small army of everyday investors banded together online to pump a flailing video game retailer and sink a whole hedge fund in the process.
Now, not only has a new meme stock emerged, but we've got a new folk hero at the center of it, posting YouTube videos and sharing well-honed theses on forums across the internet like he's the second coming of Roaring Kitty.
Dimitri Semenikhin — posting as Capybara Stocks on Reddit, YouTube, and X — is the latest in a lineage of traders whose bullishness is cheered by individuals and feared by short-sellers.
Keith Gill was the first, but we've seen others in just the last few months. Eric Jackson, while not a retail trader, has been welcomed into their ranks as he's helped kick off a bullish run in Opendoor stock this summer that has been egged on by the "diamond hands" crowd.
One theory of meme stock mania
Meme stocks come and go, but some are more enduring than others. GameStop's rise in 2021 sparked rapid rallies in mostly forgotten names like headphone maker Koss and 2000s-era mobile darling BlackBerry. Opendoor this summer ignited a surge in completely random stocks, including GoPro, Krispy Kreme, and Kohl's.
In the last few years, during the periodic spasms of meme madness, a few stocks have emerged as the ones that start it all. They jumpstart the wider rally, but their gains are also bigger and, in the case of GameStop, more enduring. GameStop is up 522% in five years. How's BlackBerry doing? (Spoiler: it's down 10%.)
So, here's the theory. GameStop, Opendoor, and Beyond Meat show that just one investor skilled enough to show their work — and put their money behind it — is the most powerful catalyst a prospective meme stock could have.
"I like the stock," Kith Gill famously proclaimed. It didn't necessarily matter why, although his fundamental thesis centered on the fact that he saw Gamestop as chronically undervalued, due to its high cash reserve and low debt ratio.
But ultimately, it was his persona that mattered most. He posted at length about GameStop online, he was fun to watch on YouTube, and was irreverent but authoritative when grilled by the suits in Congress.
In July, Eric Jackson delivered his thesis on Opendoor stock: that the company had a structural advantage in the iBuying industry as major players shifted focus to other areas.
Perhaps more importantly, he gave retail traders a very specific price target they could all support and aspire to: $82 per share.
Jackson, for his part, insists Opendoor isn't a meme stock, but stocks that trade on fundamentals generally don't rise 2,000% in a few months. He's described it instead as a cult stock, comparing it to Tesla and Palantir, two high-growth companies with extremely dedicated fan bases.
Enter Capybara Stocks
Finally, that brings us to Semenikhin. The rally he's helped engineer is new, and as of Friday, it is flailing. However, the gains were enormous in just a matter of days, with the stock up as much as 1,300% in the four days since the close on Thursday, October 16.
"This one really stands out in the tremendous community that has built up around it and really shows what a community that comes together can do even in a short amount of time," Semenikhin told Business Insider this week. The forums are awash in praise for his high-conviction bet on the fake meat maker.
"It's difficult because I never expected anyone to actually follow my investments, and now that so many people have, I feel a responsibility to reply to all of them," Semenikhin told Business Insider.
It can be argued that this hero-of-the-people energy is a basis for more prominent stocks, too. Elon Musk and Alex Karp lead much larger companies, but their appeal to everyday traders in the face of any haters brings a similar folk-hero vibe.
The real question is, why do the short sellers keep letting this happen? Haven't they learned from the fate of Gabe Plotkin? Beyond Meat shorts accrued paper losses of $120 million in four days, and short interest is still high, which means more losses could hit if the rally resumes.
But stepping back, it's easy to understand their plight. For every ailing stock that's ripe for a short bet, there's probably someone out there who has a well-argued thesis about why the same stock is primed for a short-squeeze. All it takes is one, and they're impossible to see coming.
