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As the economy exhibits signs of slowing growth, fundamentally weak stocks that surged in price over the past few months on social-media hype surrounding them could suffer a significant pullback in the near term.
Therefore, we think the shares of struggling companies GameStop Corporation (GME) and AMC Entertainment Holdings (AMC), which are currently trading at lofty valuations because of short squeezes triggered by Reddit and other social media forums, are susceptible to a massive price decline in the near term. Indeed, Wall Street analysts expect these stocks to plunge more than 50% in price in the coming months.
