The reactivation thesis: When meme stocks awaken

Disclosure: S3 Consortium Pty Ltd and its associated entities may hold direct or indirect interests in securities referred to in this publication and may receive fees or other forms of consideration from entities mentioned. These interests and arrangements may create a potential conflict of interest in the preparation of this material.

The information contained in this communication is provided for general information purposes only and may relate to speculative investments. It does not constitute financial product advice, and has been prepared without taking into account your personal objectives, financial situation or needs. You should consider obtaining independent financial advice before making any investment decision.

Any forward-looking statements are uncertain and not a guaranteed outcome.

I’ve been wanting to get my thoughts organised and written on this “dormant meme stock re-activation” theory for a long time.

(Now that it's successfully played out on one former meme stock and might be starting on a second, there is enough early signal to try and formalise it into words)

Here goes:

Remember your first ever girlfriend?

The first time you got drunk?

The first time you watched a “big people” movie as a kid?

(no not that kind, I meant like Terminator 2 or Robocop, but yeah fine, also that kind)

The first time you saw and played Super Mario Brothers on the newly released SuperNES at your mate Luke Austin’s house, in all its enhanced 16-bit graphics and improved audio glory?

Starting off a relentless months-long campaign aimed at your parents to upgrade you from the 8-bit NES?

Of course you remember.

These are core memories that live in your head forever.

Everyone also remembers their first “meme stock”.

The stock that had wild amounts of online chatroom activity that kept you engaged, entertained and informed.

And one (or maybe more) extreme price runs when it actually delivered material news, thanks to all the online attention it had.

The one you used to tell your mates about at the pub... all the time.

(The first stock code you thought of when you read the above... is yours)

When the initial run and excitement eventually dies off - meme stocks still stay on watchlists, but more importantly, in people's brains.

The theory is that IF a former meme stock can go through a couple of boring years of building/fixing and execution, and be about to finally “deliver the promise”...

(into a buoyant sentiment for the sector in which they operate)

That dormant army of former followers' attention can be re-activated, delivering a material rerate, maybe even above its previous meme stock highs.

(some examples of this working coming up, noting it's certainly no guarantee)

“Reactivation cost” is near zero compared to a new company building a similar following from scratch.

Most small cap ASX companies have less than a thousand shareholders, if that.

And near zero online followers, let alone commenters.

(effectively no one really cares, no matter if they release good, bad or average announcements)

A company announcement is only as good as the number of people that read it, then care about it.

Think about what it takes to get, say, 50,000 investors being aware of a small stock for the first time.

That's a LOT of conference presentations to rooms full of 30 people... and PR firm webinars with 75 views on YouTube for the CEO to do...

The company needs a launch story. Legacy media coverage. A few price moves to attract attention. Months and years of compounding momentum to even get on the mental radar, let alone the watchlist.

A former meme stock already has all of that. It's just dormant.

That (in our view) is the mispricing most can’t see on a screen, price chart or using fundamental analysis.

And this hidden value doesn't show up on the company’s balance sheet.

Another way to think about it is like this:

Ever notice how Hollywood can't stop making the same movies?

Star Wars. Marvel. Transformers.

Fast & Furious - they're onto movie 11 and last I checked they have literally gone to space:

Jurassic Park keeps finding new ways to let the dinosaurs out.

Disney is remaking every single one of its animated classics in live-action.

Why?

Because building audience awareness and familiarity from scratch is hard.

Really hard.

You need to invent characters people care about. Write a world they want to return to. Convince millions of strangers to spend two hours with something they've never heard of. And then hope they tell their friends.

OR...

You can just make Fast & Furious 12.

The audience already knows Dom. They already know "family." They already bought the t-shirt. All you need is a trailer and an opening weekend.

It's the same reason Disney bought Lucasfilm for $4 billion in 2012.

They weren't buying spaceships and lightsabers.

They were buying decades of built-up recognition by hundreds of millions of people.

Characters people already love. Stories people already know.

A shortcut past the hardest part of any business: getting people to care in the first place.

And this isn't just a “movies” thing.

It applies in nearly any business - including (in our opinion) small cap ASX stocks.

Hence the theory that “former meme stocks with real company progress” could be one of the most mispriced corners of the market.

(Caveat, the thesis doesn't work for just any former meme stock, they need to have gone through a couple of years of purgatory where they quietly execute on their project and are finally about to deliver the long awaited goods)

...but first you need to understand these three things otherwise you won't fully appreciate the story (my wife hates when I do this “ FFS, just tell me the story”).

#1 What exactly is a “meme stock” (in our context)?

A “meme stock” is a stock where the share price is driven by a huge crowd of (mainly) retail investors talking to each other on chatrooms and social media.

(making and sharing “memes” about the company and its management - some are lit, others are mid. Are these images even called “memes” anymore? Do kids still say “lit”? Sincere apologies for cringemaxxing on this last paragraph.)

Ideally, all the “well above average” levels of attention amplifies the underlying fundamentals.

Fundamentals good and improving = price runs hard.

Fundamentals go bad = price falls hard.

These are the kind of stocks people tell their friends about (further accelerating the attention snowball, attention = capital = company progress)

In this context, we are NOT using “meme stock” as a derogatory term (we are assuming the company has a legit project).

Our view is that a stock with a quality project/business AND has a huge, active and engaged online following...

Is generally better to hold than a stock with a quality project/business that nobody knows or cares about.

(ie: Fast and Furious 12, recognition and getting people to care about progress is the hard bit)

Huge attention PLUS delivering on the plan = higher share price AND ability to raise more capital.

More capital = more ability to execute bigger and faster.

Execution = derisking and baton pass to larger funds and institutions, entry into an index.

(then you just need the macro theme sentiment to be strong along the way, and it's a recipe for a great outcome)

Key features of a meme-stock:

• A huge retail following (not just institutions)
• Price moves on narrative and momentum, accentuated by news (good = up, bad = down)
• The community lives on forums like X, HotCopper, Reddit, Discord.
• And the important thing... it continues to live rent free in peoples heads\watchlists after the chatter dies down and share price comes off.

#2: The 1-9-90 “iceberg” rule of the internet

Here's the thing most people get wrong about meme stocks after the hype fades.

They see quiet (or angry and dwindling) chatroom threads.

They assume the stock has been forgotten.

(in our opinion) It hasn't.

The internet runs on what's known as the 1-9-90 rule.

1% of users create content.

9% engage with it (respond).

90% just read.

This is generally true on basically every platform ever built. Reddit. HotCopper. YouTube. X. Similar ratio everywhere.

So when a meme stock's forum goes quiet, it doesn't mean everyone has forgotten the stock. It means the 1% got bored of posting.

The other, silent 90% are still there. Some are still holding (in the bottom drawer). Others sold but are still checking the ticker to see if the company finally “did the thing” after all these years.

Invisible in any data you can scrape.

(can’t exactly stick “latent recognition from dormant meme stock army” on the quarterly balance sheet)

The 1-9-90 rule is why the base of a former meme stock is always bigger than it looks, and in our opinion shouldn't be under-estimated.

And it's why re-activation feels so fast when (if) it finally happens.

The silent majority was holding or watching the whole time.

Just waiting for a reason to come back again.

You can't see an iceberg from a helicopter. You have to know it's there.

I still remember when one of my first meme stocks finally delivered on the promise years after the online excitement died down.

(back then they weren't called meme stocks, memes weren't invented yet)

“Honey, remember that stock I used to never shut up about, it finally drilled that oil well in Somalia”.

#3 Key to reactivation of former meme stocks thesis - company has to deliver legitimate progress.

It’s a thesis we have recently Invested in and observed playing out with other companies (an example where it worked in a second).

A “meme stock” is a stock that gains popularity among retail investors through social media.

All the attention is great when things are going well...

But all that attention can be a double edged sword when things go wrong... there’s nowhere to hide from the emotions of an angry mob.

OR when things get boring.

In summary, a late stage meme stock company (after a big run):

• Still lives rent free in many people's heads AND on their watchlists.
• People will still check for announcements regularly from the company (even though they may not admit it).
• The Company starts doing something exciting again.
• Past investors come back just in case “it actually happens” this time (and it turns out “hey, I was right all along!”)

AND if the company actually delivers something material - there are enough eyeballs on the stock to re-rate the stock to a level to reflect the company’s new progress.

(Fast and Furious 12)

It’s important to note this is just a thesis, and there’s no exact concrete formula or science behind market moves.

The base doesn't leave. It “naps”.

The boring phase of a former meme stock looks like this:

• Institutions long gone
• Retail forum activity dies down (the 1% that post got bored... or angry/despondent)
• Price drifts sideways or down for a couple of years (good entry point)
• Many declare it “dead”

And yet. The iceberg is still there. The name recognition is still there. That Discord and that HotCopper thread are still there.

Which means the “reactivation cost” is near zero compared to building a new audience from scratch.

Again, think about what it takes to get 50,000 retail investors aware of a stock for the first time.

That's a lot of conferences and webinars for the CEO to do...

A former meme stock already has all of that. It's just dormant.

Three famous (global) examples of the base waking up... plus one that didn’t.

We have seen this theory play out with a couple of the “world famous” former meme stocks - we’ll quickly cover these before we get into the examples where we are Invested:

🇺🇸 GME - GameStop Corp

Before 2021, NYSE listed GameStop was a dying brick-and-mortar video game retailer.

The original meme stock. Had its 2021 meme stock run, raised over US$1.5 billion, then drifted quietly for three years while everyone declared it dead.

In May 2024 its dormant supporter base was re-activated.

A tweet from its original supporter after years of silence.

Plus the company announced a new bitcoin treasury business, and had some other new investments from funds raised during its initial, unlikely price run.

The base came back overnight and the stock ran triple-digit percentages higher in days.

And raised a further $3 billion to continue executing the re-invention of the business.

No way a company like GME could have done this without the meme stock support (just look at the share price before 2021, imagine trying to raise cash on that chart):

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

GME was the first and most outrageous meme stock price run, regularly making global news.

The GME meme stock run was the focus of SEVEN documentaries, and even got a full length feature film made about it.

(a nice cross over to our previous analogy of making movies where there is already strong familiarity amongst hundreds of millions of people)

HOOD - Robinhood Markets Inc

RobinHood is a zero commission trading platform aimed at retail investors.

IPO'd at $38. Fell to $7. The finance press wrote the obituary.

But the retail armies the trading platform was literally built for never left.

When crypto woke up, the base was ready, and HOOD went up back ABOVE it’s original meme peak highs.

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

HOOD is an example where the reactivation of the dormant supporter base with some company progress AND macro tailwinds winds (2024 bumper year for crypto trading) reactivated a dormant supporter base and took the stock past its initial meme stock peak.

🇺🇸 PLTR - Palantir Technologies Inc

Retail favourite that got crushed through 2022. Left for dead by institutions.

Then PLTR added AI into their products and the dormant supporter reactivated.

When the broader AI narrative finally hit, the base pushed it from single digits into a trillion-dollar fever by 2025:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

PLTR is another example where the reactivation of the dormant supporter base with some company progress AND macro tailwinds winds (adding AI into their products) reactivated a dormant supporter base and took the stock past its initial meme stock peak.

🇺🇸 AMC - AMC Entertainment Holdings Inc - the one that hasn’t re-activated yet.

Ok, this is an example of a meme stock that DID NOT get a proper second wave... (yet?)

AMC was a struggling movie theater chain getting crushed by streaming and then nearly killed off by COVID lockdowns, sitting on a mountain of debt and trading near bankruptcy levels.

The wallstreet-bets reddit thread turned it into the second-most famous meme stock after GME.

AMC cinemas rode the 2021 “retail short squeeze” shoulder to shoulder with GameStop. It built one of the loudest retail armies on the internet.

AMC famously took some of the money it raised with its meme stock energy at its peak and invested it into a sleepy little gold and silver company called Hycroft Mining (HYMC).

Other than that, it didn’t really manage to successfully leverage the attention, spent the quiet years diluting and reverse-splitting (which is usually what happens when a company doesn't know what else to do). And yet the dormant base never fully left.

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Here's where it gets interesting for us.

When AMC took a stake in Hycroft Mining (HYMC), HYMC absorbed a lot of AMC’s support army and became a major US meme stock of its own:

(source)(source)(source)

Which brings us to the meme-stock re-activation stories we are currently Invested in:

🇺🇸 HYMC - Hycroft Mining just commenced reactivation post its meme stock run

HYMC was the second biggest global meme-stock AMC’s bet outside the cinema.

The Hycroft Mine in Nevada is a massive gold and silver project. We're talking one of the largest precious metal resources in the US - an estimated 16.4 million ounces of gold and 562.6 million ounces of silver.

(yep, a recently broke cinema meme stock invested in a gold and silver company)

Peak meme stock moment was 2022 when AMC and legendary resources investor Eric Sprott both put money in.

Then gold and silver were boring. The share price and chatrooms went quiet.

HYMC was the first stock where we Invested on our “reactivation of dormant supporters” thesis (back in September 2025).

We actually flew over to Nevada and visited the mine. Read our visit here.

HYMC is up over 2,000% after reactivating some of its meme stock glory over the last 6 months (we missed the first bit of the run up).

Driven by gold and silver’s record run AND increase in exploration activity:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

You can read our early comments on reactivated meme stock energy and our site visit to Hycroft here.

(HYMC is a NASDAQ listed stock so we aren’t actively covering it, we currently focus on ASX listed stocks)

For Hycroft to re-enter “meme stock mode”, the trigger was:

• Finishing up ~2 boring years of restructuring, debt clean up and refinancing.
• Drilling and hitting a pod of high grade mineralisation.
• Gold and silver prices going on a big run.

This reactivated the dormant crowd and set Hycroft off on its next run (there was a new twitter/X post about Hycroft every ~12 minutes at one stage during run #2)

Which brings us to our ASX list “meme-stock reactivation” story from this week:

IVZ - Invictus Energy (ASX:IVZ) - first signs of “re-activation” on company progress?

After two long years of waiting, this week former ASX meme stock IVZ announced they will be drilling another exploration well this year.

IVZ has arguably one of the biggest retail followings on the ASX.

(until last week, either dormant or angry - various levels of emotional states)

IVZ is an oil & gas junior exploring the Cabora Bassa Basin, one of Africa's largest and last untested frontier rift basins.

This is proper, “basin opening” frontier oil and gas exploration (one of our favourite type of investments).

Chasing a total potential 5.5 Billion barrels of oil equivalent (prospective resource estimate).

When IVZ is drilling, its supporter base gets active and engaged.

Here is a sample of some of just a handful of the IVZ memes posted on reddit during IVZ’s peak “meme stock” era a few years back:

(source)(source)(source)(source)(source)(source)(source)(source)(source)(source)

BUT When IVZ is not drilling, they leave, or stay and get angry, and the share price goes down.

Another example of IVZ’s “dormant” audience is just look a these view counts on IVZ threads on HotCopper (keeping in mind the 1-9-90 rule of internet chatrooms we described earlier):

(source)

All we needed from IVZ to reactivate the base was a real, material, upcoming catalyst to rev them (and us) up again.

And this week IVZ delivered a plan to drill a well in 2026, a $10M cap raise with which to do it and a webinar explaining the plan - could this be the re-activation?

For IVZ we think the formula to reactivate IVZ’s dormant supporter base is to:

• Finish boring 2 years of no major drilling events
• The PPSA is signed - scheduled for April (within the next 5 days?)
• Drilling Musuma-1 well this year
• Oil & gas prices rising or stay buoyant (tick)

After IVZ officially announced it is exiting its 2 year “boring” phase on Tuesday this week, it looks like the “re-activation” might have started:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

IVZ is our first ASX Investment (Increase Position) on this theory.

Read our IVZ update from this week here

EXR - into reactivation phase on new direction?

The market loved a bit of EXR back in 2020 and 2021.

EXR is a gas explorer that pivoted from a Mongolian helium/CBM play into the Taroom Trough in Queensland (right as the east coast gas crunch became an actual political problem).

Original retail moment: 2021. EXR was THE coal bed methane hype stock on the ASX. It ran from under 1c to over 30c on a Mongolian gas story that had retail forums talking. (you couldn't move on HotCopper without bumping into an EXR poster)

Boring phase: The Mongolian project never delivered, the company eventually exited and re-shaped itself around a Queensland gas play. Three quiet years of seismic, farm-in chatter and a share price grinding sideways while the original army drifted off (or stayed and got grumpy).

EXR’s dormant following appears to be re-activating on the new direction, and the strong east coast gas macro:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

88E - reactivation phase coming?

88E had an infamous meme stock moment on the ASX. It even gathered a large USA following.

(remember that outrageous share price run in 2021? Wild times)

Alaska oil exploration. Multiple wells. Multiple massive retail runs. (and yes, multiple disappointing results)

Original retail moments: Project Icewine in 2018, Merlin-1 in 2021, Hickory-1 in 2023. Each campaign pulled in tens of thousands of retail eyeballs and ran the stock multiples higher in the lead up.

Boring phase: After Hickory-1 didn't deliver in 2023, the share price slid sideways and down for nearly three years. The 1% stopped posting. The 90% kept watching. (we think 88E is still sitting on more ASX investor watchlists than 95% of the rest of the market)

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Our filter for a re-activation setup

So how do we decide which former meme stocks (we can just call them “former highly popular stocks”) are actually worth watching?

Here's what we check before we get interested:

1. Proof of a past meme moment (volume spike, retail holder count, forum activity at peak)
2. Enough time in the wilderness that the story has been superficially forgotten (share price down and stagnant)
3. Still listed, still funded, still operating, still progressing its project (not a zombie)
4. A real catalyst visible on the horizon (drill, deal, commodity tailwind, management change)
5. Macro theme sentiment rising (important)

Check all five boxes and you've probably got a re-activation candidate.

So there it is, it's a new theory, working so far on a very limited set of Investments.

Let us know if you have any former meme stocks that fit the above criteria (or even just stocks that used to have a huge online following that took too long to deliver the goods, but are now close to getting there).

Before we finish, one stock to watch on Monday, our most recent Investment Patriot Resources (ASX:PAT).

PAT announced up to 774 Million oz silver Eq JORC exploration target - one of the largest undeveloped silver systems globally

On Friday (yesterday) PAT announced it now has one of the largest undeveloped silver systems globally.

Up to 774M ounces silver equivalent JORC exploration target - here’s what we said:

We don’t see many micro cap explorers with JORC Exploration Targets, because they can be viewed as a “luxury” and too expensive and time consuming to generate... and can kill a project before drilling if they end up being too small.

So how on earth did $20M capped PAT get enough data, samples, geophysics and 3D modelling to generate such a large JORC exploration target?

$42BN Teck had this project optioned between 2019-2024, before PAT acquired it.

Mining majors don’t mess around when collecting pre-drill data.

They spend big, take time and have big technical teams.

(unlike cash, time and team constrained micro cap explorers - imagine if an ASX explorer told the market drilling was “4 years away”)

Teck ran ~36km of IP geophysics across it.

Built an (expensive) 3D geological model.

Had 1,832 surface samples.

Then, right before drilling, Teck’s board of directors pivoted the entire company's focus to copper...

and told everyone in the company to stop work on any non-copper projects.

Think of it like when you were a kid playing Super Mario on Nintendo (or Sonic for Sega kids), you were on the cusp of beating a very hard level and...

Your Mum made you turn it off and go to bed... “RIGHT NOW”.

“But, but, but I’ve been trying for hours and I’m so close...” - I don’t care, BED TIME, NOW!

That's like what happens when big company boards change direction and pull the handbrake on promising projects that don't fit the new direction/focus.

It doesn’t matter how prospective things were looking, or how much time, effort and money had been spent - the broader plan has changed, and Mum says go to bed right now).

Mining major Teck wouldn’t spend four years of a technical team's time on something that looks like “just” a 31Moz inferred JORC resource.

The company would have been looking for the much bigger system hiding underneath.

(mining majors generally only go after Tier 1 global asset potential)

PAT got the project - and all the data.

It’s not only Teck’s data, PAT collected all the work done by companies on this project BEFORE Teck.

Bear Creek Mining owned the project and drilled some of it in 2010.

PAT has delivered the first-ever integration of 20+ years of multi-source datasets into a single JORC-compliant geological model.

(like your little brother waking up early the next day and throwing the final turtle shell at Bowsers head... from all the work in your saved game)

Now we want to see PAT start drilling it, into the silver price run we think is about to happen...

Read our full PAT update on this news here

That's it for today, no robots this week, this has already gotten too long, they’ll be back next week.

Have a great weekend,

Next Investors.