The Daily Chase: Roaring Kitty has meme stocks roaring for second day

Here are five things you need to know this morning.

Meme stock mania continues: Monday’s frenzy over meme stocks has extended at least into a second day, as names like GameStop, AMC and others are soaring again premarket. Monday’s X return of Keith Gill — also known as Roaring Kitty — has reignited interest a slew of stocks that haven’t done much since the halcyon days of 2021, when Redditors on the Wall Street Bets forum poured into various heavily shorted names in the hopes of catching Wall Street in a squeeze. With 187 million shares in the company changing hands yesterday, GameStop is once again leading the charge, but once the hype dies down, it’s hard to imagine things playing out any differently this time around. Set aside the “Mother of All Short Squeezes” for a moment and consider the fundamentals: the game retailer’s annual revenues are forecast to fall for the third consecutive year, and the company hasn’t posted a full year of profitability since the pandemic began. Making money investing in money-losing companies is certainly nothing new, but beyond any short term mania, it’s hard to see a world of sustained gains from where things stand now. As Ryan Lewenza, a portfolio manager at Turner Investments told BNN Bloomberg’s The Street this morning: “Some people are going to make some money, but this is going to end in tears.”

Home Depot woes continue: Home Depot posted quarterly results before markets opened on Tuesday, and the numbers from the home renovation chain showed same-store sales falling for the sixth quarter in a row. The company was one of many to benefit in the early days of the pandemic, as millions of people being stuck in their homes prompted a flurry of do-it-yourself projects. But it’s been tough sledding since late 2022, as the company is having a hard time maintaining that pace of growth amid high inflation. Total sales including those at new stores fell by 2.3 per cent to US$36.4 billion. The initial reaction on the stock market, however, appears to be positive as the shares are trending slightly up in premarket trading.

Japanese car part maker to build Ontario facility: The full scope of Honda’s electric vehicle supply chain in Ontario seems to be taking shape as Japanese component maker Asahi Kasei is set to announce the construction of a new battery-related plant near Niagara today. The company announced the plans to build a facility in the province a few weeks ago, but the Globe & Mail was first to report some new details this morning, including that the plant will be in Port Colborne, Ont. The company says the plant could be operational as soon as this fall for a price tag of $1.6 billion. Prime Minister Justin Trudeau, Ontario Premier Doug Ford and other officials will be at an event there this morning to unveil all the details. We’ll bring you more as we have it.