There is no doubt that one of the most prominent themes of 2021 has been the rise of the retail investor. Even though John and Jane Q. Public have put their money to work on Wall Street for more than a century, they rocked the boat more than ever this year.

This crowd of retailers was particularly drawn to the online investment app Robin Hood ( HOOD -2.53% )which offers commission-free trading, fractional stock investing, and free stock analysis to new members trading on the platform.

Among the 100 most-held stocks on the platform are three Robinhood stocks that completely blew Wall Street’s expectations for the year. If retail investors put $200,000 into working in these popular Robinhood games to start the year, or when they started trading in 2021, they would be sitting on $1 million or more by now.

AMC Entertainment: $2,690,000 (up 1,245%)

The best performing large-cap stock of 2021, as well as Robinhood’s biggest winner, is the movie theater chain AMC Entertainment (AMC 13.58% ). The third most-held stock on Robinhood has soared 1,245% year-to-date, over the holiday weekend. This means that an initial investment of $200,000 would be worth nearly $2.7 million.

Most of AMC’s gains came from a short squeeze in late January and early February. Short sellers (investors wanting the price of a security to go down) were betting that AMC wouldn’t be able to raise enough cash to keep the lights on. However, the company was able to save itself by selling around 164 million shares and issuing high-interest debt in late December 2020 and early January 2021. This capital increase caught short sellers off guard, which briefly sent AMC’s stock to the moon.

Retail investors are also enticed by the idea that AMC will rebound from its pandemic woes as vaccination rates rise. The recent release of Spider-Man: No Coming Home particularly aroused the crowd of retailers. The film is on track to be the first to gross over $1 billion in global box office sales since the pandemic began.

But despite these gains, I am convinced that AMC is the worst stock you can buy right now. Inflation-adjusted domestic box office sales were down 22% between 2002 and 2019, so things weren’t exactly looking good for AMC before the pandemic hit. Now, the company’s theatrical exclusivity period has been reduced to 45 days (or less), when 75-90 day exclusivity was the norm. Streaming continues to slowly shrink AMC’s core business.

Additionally, a quick look at the company’s balance sheet should quickly close the curtain on the hype surrounding this very stock. AMC is dragging about $5.45 billion in debt at a projected average interest rate of 8%. Remember, lending rates are at historic lows and AMC is actually paying limit default interest rates. To boot, over $1 billion in aggregate debt due in 2026/2027 is valued at 30% or more below face value. This is further evidence that bondholders believe AMC could eventually file for bankruptcy.

There’s no doubt that AMC is the title to avoid in 2022.

Image source: Getty Images.

GameStop: $1,616,000 (up 708%)

Another Robinhood stock that turned $200,000 into well over $1 million in 2021 is a games and accessories company GameStop ( GME 14.50% ). Currently the 30th most owned title on Robinhood, GameStop has galloped over 700% in 2021. That means a $200,000 investment has turned into over $1.6 million.

GameStop and AMC are effectively tied at the hip when it comes to short squeeze mania. GameStop was actually the company that ignited retail investors’ fascination with high-interest stocks in mid-January. Since GameStop’s short-term interest was higher than that of any publicly traded company at the time, it was the target of a very quick but effective short squeeze.

Investors who continue to hold GameStop mostly expect another short squeeze to take place now that the shares are down nearly 70% from their all-time high. They’re also likely counting on GameStop to boost sales given its investments in digital games and other accessories.

While I’m nowhere near as bearish on GameStop as I am on AMC, there’s no justification for a market cap of $11.6 billion for a company that’s years away from righting the ship.

On the bright side, GameStop is sitting in a healthy net cash position (meaning it’s not a bankruptcy issue like AMC), and it operates in a digital game industry in full growth. However, the lifeblood of the company has always been its physical stores, which now weigh a little on its sales and results. GameStop will likely close stores for years to cut expenses and get back into the profit column, once again.

Additionally, GameStop’s turnaround strategy leaves a lot to be desired. Wall Street and investors haven’t been given the finer details of how the company will gobble up shares in the digital gaming arena.

Again, the company’s net cash should provide a much higher floor for its share price than it did pre-pandemic. But with steady sales growth or unlikely profitability for years, there is significant downside potential with GameStop.

Former President Donald Trump speaks with reporters. Image source: Official White House photo by Joyce N. Boghosian.

Digital World Acquisition Corp. : $1,068,000 (434% increase)

Robinhood’s third stock to skyrocket in 2021 is the Special Purpose Acquisition Company (SPAC) Acquisition of the digital world (DWAC 0.35% ). Since its debut in late September, shares of Digital World Acquisition have increased by 434%. This means that a $200,000 investment on day one would be worth nearly $1.07 million less than three months later.

While most of the SPACs were destroyed in the second half of 2021, Digital World Acquisition soared after the announcement of a merger agreement on October 20 with Trump Media and Technology Group (TMTG), the social media platform led by former President Donald Trump. TMTG’s platform, known as Truth Social, will offer a subscription-based video streaming service, as well as access to news, podcasts and documentaries, among other content. The deployment of this content platform is planned for the first quarter of the coming year.

Earlier this month, Digital World Acquisition announced that it had secured commitments for $1 billion in capital after the merger between it and TMTG was completed. This funding will be combined with the approximately $293 million that Digital World has raised with its SPAC debut. In total, after expenses, TMTG is expected to have approximately $1.25 billion in capital to fund its operations.

On the one hand, there’s no denying that former President Trump has a loyal following that will likely jump at the chance to be a part of Truth Social’s content offering. If these people become subscribers and/or if TMTG can effectively monetize these users, this media venture could prove successful.

On the other hand, the media space is highly competitive and TMTG is still in the development stage of its content offerings. The company is almost certain to lose money as it ramps up, making it difficult to trust its current valuation. For now, it’s a title to watch with interest, but not to own.