Kiwi investor Luke McNeil first jumped in when he saw lots of people talking about it on social media.
"It started with GameStop. At the time I had no idea even what any of these companies were. I didn't even know that AMC was a movie theatre or anything. I just caught wind of all of this stuff and then started reading about it and went and sold my Tesla [shares] and went into GameStop and started making lots of money over three days."
McNeil is just one of the more than 10,000 New Zealanders who got caught up in the "meme-stock" phenomenon of early 2021 and are now feeling the pain as those stocks take a hammering.
• READ MORE: Fear factor: How this market crash could affect new investors
Meme stocks are listed companies which gain popularity among retail investors through social media platforms such as the Reddit site's WallStreetBets.
Video game retailer GameStop was one of them. Trading at less than US$5 a share in late 2020, the company's shares became an overnight meme sensation, resulting in the price soaring to US$325 a share on January 29, 2021.
But now those shares are worth less than US$90.
McNeil initially put in $12,000 via investment platform Hatch. It was all of his savings at the time - something he now admits was probably a bad move.
But he made a quick $20,000 and then sold out before reinvesting about $5000 back in the stock.
Some of those who climbed into GameStop did so in a bid to stand up to big hedge funds that were shorting the stock - taking bets on it falling in value.
That's why Rotorua-based investor Aaron Matthews got into the company.
"It is more to hold the short hedge funds accountable for their actions and what they do around the smaller companies.
"We believe they have gotten away with what they do for too long and it's time for more of a level playing field in the marketplace. At the moment it is definitely tilted to one side in their favour and we think it is time we make a stand."
Matthews invested $70,000 in GameStop, also via Hatch, before selling when the value of his investment rose to $123,000.
He says he then invested another $70,000 in marijuana stock Tilray and made $263,000 in three days.
"I was day trading up until the middle of last year, which was quite lucrative, and decided to pour quite a bit of money in."
Since then he has been buying and holding.
But the quick gains have disappeared. The Nasdaq sharemarket index - which includes many high-tech firms - has fallen from a November 19 peak of 16,057.44 to 11,264 on Tuesday's close - a drop of nearly 30 per cent that officially puts the market in bear territory.
The wider S&P500 index has fallen nearly 18 per cent so far this year after peaking on January 3, while New Zealand's own NZX50 was down 15.8 per cent from its October peak as of Wednesday morning.
AMC Entertainment Holdings, which owns and operates theatres in the US and Europe, saw its share price rise from US$2.12 at the end of 2020 to hit US$59.26. This week it was trading at US$10.39.
Matthews says he isn't concerned about markets falling. "I'm not worried at all. It is part of the game," he says. "The further they drop the price, the more myself and probably millions of others around the world are buying."
Kristen Lunman, chief executive of investment trading platform Hatch, says about 1 per cent of its investor base were in GameStop and AMC a year ago and that has held steady around 1.3 per cent this year, with no signs of panic selling despite the share price drops.
"For most people these stocks are not for them," she says. "They are massively volatile. When you originally invest in them you are not investing in the fundamentals of the business. So all the traditional rules of why you might invest in a company go out the window. And that is not for everyone.
"But I'm not seeing selling. And that is their prerogative."
Gus Watson, head of investments at Sharesies, says at the peak of the meme stock frenzy in March last year it saw sign-ups spike to about 3000 a day for a week.
About 100 Sharesies users owned GameStop in November 2020, but by March 2021 that had climbed to more than 10,000.
"We saw massive upticks to sign-ups to Sharesies - there was this potential to make money really quickly that was being talked about in the media and forums and the easiest way to do it was via investor platforms.
"We were seeing 3000-4000 people a day signing up."
He said it was a big learning moment for the platform.
"Internally, the discussions here were: we have got investors coming here for quick wins but how do we convert these people to long-term investors rather than being in trying to make a quick buck getting burnt and leaving?"
On its app, the platform added a warning flag to the investments.
"We are still flagging these stocks as volatile investments within the app because we recognise the volatility around them and also a lot of the hype around them. We have added that friction point in the app. I think there is about 10 stocks in the platform that still sit with that flag.
"It's just a nudge to remind people to understand the risks." And Sharesies focused on educating members about building wealth over the longer term and diversification.
So far, most investors are sticking with the companies, with about 9300 users still sitting in GameStop and AMC.
"I think it is representative of a lot of our investors and how they behave with investments. It's really buy and hold, with some on the fringes that will be buying and selling a bit more."
Watson says GameStop and AMC are just two of the 8000 investments available on its platform.
"They will be well under 1 per cent of total holdings but they have generated so much interest and so many questions on how our investors behaved.
"If you look at the holdings in Meridian or Tesla or Mainfreight, they are significantly higher but no one is ever interested in those ones."
Lessons learned?
In January 2021 the New Zealand Shareholders' Association warned amateur traders to be careful about diving into a quickly changing "stockmarket war" such as the GameStop phenomenon, without fully researching what they were getting into.
Association chief executive Oliver Mander says in terms of lessons from a purist perspective, the lesson is to always understand what you are buying into.
"In this case the share price bore little resemblance to the financial outlook for the organisation. I would note what is interesting is that GameStop was trading at a very low level before the whole meme thing.
"Then it went up to US$325 at its peak and it's now trading at around US$99. It is valued more highly than what it was prior to the entire phenomenon unfolding. When their share price skyrocketed they took advantage of that to raise capital at the higher price and invest that in their business. So somewhat ironically, it was actually what the company needed to grow and drive that transformation."
Mander says investors will often buy on emotion and because of how they feel about a company, and having a bit of faith in it.
"And to some extent that is appropriate. But it is also making sure you ... it's kind of like having a drink - everything in moderation - you have to balance that with good sources of other types of information."
He says investors should consider financial information and look at a company's strategy and how that is likely to play out.
As for McNeil, he hasn't given up, though he has doubts about his investments' prospects.
"It worked okay for me the way I timed everything," he says. "I do still have money in there at the moment but I doubt I will ever get it all back. Who knows? With the market being so far down at the moment it is a bit unknown what is really going to happen."