• According to AJ Bell investment director Russ Mould, some traders will want to take profits from a stock surge, while others will be“left holding the bag.”
• Mould also flagged that the regulator can take“umbrage and get involved” when the price of an asset is pushed around.
• On Wednesday, Beyond Meat's shares jumped over 112% and hit $7.69 before closing down 1.1% at $3.58.

As the meme-stock rally is back in the spotlight, with shares of Beyond Meat and Krispy Kreme seeing huge gains, AJ Bell investment director Russ Mould said it would be hard to push around the price of a security or asset sustainably.

Mould argued that recent speculative movements raise serious questions about whether the Federal Reserve should be considering a reduction in interest rates and a loosening of monetary policy when financial markets remain very hot,“given the potential for someone to get badly hurt if yet more liquidity is poured into the system.”

Why Can't Asset Prices Rise Infinitely?

Mould also outlined three reasons why it would be difficult to sustainably move asset prices.

He said that some traders will want to take profits from a stock surge, while others will be“left holding the bag.”“At least one unfortunate person must have paid the top tick in GameStop at around $87 and be sat on a loss to this day,” he stated, according to a note.

He also noted that all short squeezes or ramps have an element of a pyramid scheme about them, as they need new money coming in to maintain the upward price momentum, and eventually, one starts to run out of money.

Mould also argued that the regulator can take“umbrage and get involved.” He noted that authorities, however, tend to get involved once the bubble has burst, and heavy losses, financial distress or broader market or economic turmoil have materialized.

Beyond Meat And Krispy Kreme

On Wednesday, Beyond Meat's shares jumped over 112% and hit $7.69 before closing down 1.1% at $3.58. Krispy Kreme shares jumped nearly 38% but closed up only about 9%.

“This time it is Beyond Meat and Krispy Kreme, rather than GameStop, AMC Entertainment or even silver, but social-media focused meme stock hunters are back looking for quick bucks,” Mould stated.

“Regardless of how long this latest speculative episode lasts – and Beyond Meat rose from $3.62 to $6.50 and then fell back to $3.58 on Wednesday alone – it does raise serious questions,” Mould said. 

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