Retail investors in South Korea who are seeking short-term profit are increasingly investing in so-called meme stocks, those that see a spike in trading volume based on social media hype rather than the company’s performance.

Data compiled by securities information portal SEIBro, operated by the Korea Securities Depository, showed Tuesday that small domestic investors traded US movie theater chain AMC shares the most in the overseas stock market last week.

The value of AMC stock traded by local investors marked $566.97 million, more than double the amount spent on the second-most-traded stock, Tesla, which was $210.42 million. GameStop came fourth with $113.33 million in the same period.

Amid growing expectations for the reopening of the economy, the average daily trading amount more than tripled last week compared with this year’s average, the data showed.

The meme stock fad may extend to the Korean stock market as well, with Doosan Heavy Industries & Construction’s stock being a prime potential meme stock. Experts suggest that investors approach meme stocks with caution since their share prices soar due to retail investors’ expectations rather than their outstanding fundamentals.

The stock price of Doosan Heavy surged after the recent summit on May 21, when the leaders of Korea and the United States agreed to pursue further cooperation in overseas nuclear markets.

Shares rose 27.49 percent to a new 52-week high of 32,000 won ($28.70) a day earlier. The share price jumped nearly 132 percent from 13,800 won at the closing of May 20. Its market capitalization also soared to the record-high of 13.52 trillion won on the same day. Over the past year, the power plant builder stock had skyrocketed 548 percent.

But following the sudden surge, Doosan Heavy shares plummeted 20.78 percent to 25,350 won per share at Tuesday’s closing bell.

Fueled by investors’ hopes for a normalizing economy, shipping company HMM’s shares were the subject of the most online searches and purchases, according to data compiled by Mirae Asset Securities.

The shares have also advanced 711 percent within a year. The stock has experienced an adjustment this month but it closed at 45,050 won per share, gaining 6.38 percent from the previous session’s close.

“The popularity of meme stocks appears to be driven by investors’ desire to make profit as they find it difficult to buy housing or prepare for retirement only with basic income,” said Hwang Sei-woon, a research fellow at the Korea Capital Market Institute. “They also believe that they can no longer make profits with traditional investment methods (such as savings and relatively stable profit-generated stock investments).”

Since meme stocks went viral, market watchers have warned investors to be aware of possible nosedives in share prices. The US Securities and Exchange Commission also said it was observing markets as meme stocks continued to gain, and was looking for any signs of misconduct or manipulation.

By Jie Ye-eun (yeeun@heraldcorp.com)