A meme stock is a stock that gains popularity among retail investors through social media. The popularity of meme stocks is generally based on internet memes shared among traders, on platforms such as Reddit 's r/wallstreetbets. Investors in such stocks are often young and inexperienced investors.
What will be the next big meme stock?
While GameStop’s reign as king of the meme stocks doesn’t seem like it’s likely to end anytime soon, the r/WallStreetBets crowd on Reddit is always looking for the next big thing ... which tracks stock ticker mentions in the forum.
How to follow meme stocks?
The stock is trading at seven times its price at the start of last year. Other meme stocks have fared worse, with favored retailers especially lagging the broader market. Higher interest rates often correlate with lower valuations for riskier assets, with investors fleeing meme stocks, cryptocurrencies and the electric-vehicle sector.
What are meme stocks Investopedia?
Some of these terms include (along with emojis used to denote them online):
- Apes: 🦍 Members of the meme stock community. ...
- BTFD: An acronym for buy the f***ing dip. ...
- Diamond hands: 💎🤲 This has come to mean holding onto a stock despite (even heavy) losses, confident that the price will soon increase.
- FOMO ( fear of missing out ): As in: if you don't catch the meme stock wave, you'll regret it.
What does meme investing mean?
- Early Adopter Phase: A handful of investors believe a particular stock is undervalued and begin to buy in large quantities. ...
- Middle Phase: People who are paying attention begin to notice the increase in volume. ...
- Late/FOMO Phase: Word about the stock spreads across social media and online forums. ...
What are meme stocks examples?
List of meme stocks to watchGameStop (GME) The most famous example of a recent meme stock controversy involves the US video gaming and consumer electronics retailer, GameStop. ... AMC Entertainment (AMC) ... BlackBerry (BB) ... Nokia (NOK) ... Bed Bath & Beyond (BBBY)
Why do they call meme stock?
A meme stock is a stock that has seen an increase in volume not because of how well the company performs, but rather because of hype on social media and online forums like Reddit.
What is the best meme stock?
The 7 Best Meme Stocks to Buy NowSPCEVirgina Galactic$6.37TLRYTilray$4.3513AMCAMC Entertainment$10.87GMEGameStop$100.55BBBYBed Bath $ Beyond$8.362 more rows•May 25, 2022
Are meme stocks real?
What exactly are meme stocks? Simply put, meme stocks skyrocket in price in a short period (often hours or days) because of a sudden surge in interest online or on social media and subsequent buying among small individual investors.
Should you buy meme stocks?
While some Reddit traders were able to make a lot of money in a short amount of time by buying and then selling AMC and/or GameStop at the exact right moment, investing in meme stocks is generally very risky. A meme stock's value is a result of its hype on social media and not necessarily the company's performance.
Is GameStop a meme stock?
GameStop is the mother of all meme stocks. In fact, it was the stock that kicked off the whole meme frenzy. For most of 2020, GameStop was trading for less than $5 per share, and it looked like the COVID pandemic would destroy the retailer for good. But then Ryan Cohen, the founder of Chewy (CHWY) - Get Chewy Inc.
What are the top 10 meme stocks?
The Best Meme Stocks to BuyAmazon (NASDAQ:AMZN)Meta Platforms (NASDAQ:FB)Tesla (NASDAQ:TSLA)Apple (NASDAQ:AAPL)Snowflake (NYSE:SNOW)Palantir (NYSE:PLTR)SPDR S&P 500 ETF Trust (NYSEARCA:SPY)
What is the full meaning of meme?
meme \MEEM\ noun. 1 : an idea, behavior, style, or usage that spreads from person to person within a culture. 2 : an amusing or interesting item (such as a captioned picture or video) or genre of items that is spread widely online especially through social media.
What is a meme stock trader?
A meme stock is a stock that gains popularity among retail investors through social media. The popularity of meme stocks is generally based on internet memes shared among traders, on platforms such as Reddit's r/wallstreetbets. Investors in such stocks are often young and inexperienced investors.
Is meme an acronym?
Modelled on the form of the word gene, meme is a shortened form of Greek mimēma, meaning 'something imitated'.
How do you pronounce meme stock?
0:424:11What are 'meme stocks?' - YouTubeYouTubeStart of suggested clipEnd of suggested clipAnd created waves in investment circles just have a look at twitter or reddit. And see how much ofMoreAnd created waves in investment circles just have a look at twitter or reddit. And see how much of an impact they have over the financial markets.
Is GameStop a meme stock?
GameStop is the mother of all meme stocks. In fact, it was the stock that kicked off the whole meme frenzy. For most of 2020, GameStop was trading for less than $5 per share, and it looked like the COVID pandemic would destroy the retailer for good. But then Ryan Cohen, the founder of Chewy (CHWY) - Get Chewy Inc.
Where to put your money instead of meme stocks
Though the idea of amassing crazy wealth overnight is obviously appealing, the reality is that the odds are heavily stacked against anyone trying to outsmart the market. The meme investors who walked away with a lot of money were arguably just very lucky. This kind of trading is ultimately not that much different than gambling.
If you do want to trade meme stocks
For those still itching to trade the next viral stock, invest only with money you can afford to lose. Before you invest, you should make sure you already have an emergency fund set aside, you’ve paid off your high-interest debt and you’re already contributing to a retirement account (and meeting any 401 (k) employer match, if applicable).
What is a meme stock?
A meme stock is a security that has seen an increase in trading volume after going viral on social media or an online forum. Meme stocks have become increasingly popular due to a Reddit page called WallStreetBets.
Why do meme stocks rise?
Meme stocks rise in popularity because of conversations held online. Due to internet virality, they tend to see rapid price spikes. Because the increased price is artificial and not the result of the company’s actual performance, these spikes are usually followed by an inevitable crash.
What does it mean to short a stock?
Short selling is when an investor—often an institutional investor like a hedge fund —borrows a stock and sells the shares with the intention of buying it back later to return. When someone shorts a stock, they’re betting the stock price will go down between the time they sell and repurchase the stock.
What is the early adopter phase of a stock?
Early Adopter Phase: A handful of investors believe a particular stock is undervalued and begin to buy in large quantities. The stock’s price slowly begins to increase. Middle Phase: People who are paying attention begin to notice the increase in volume. More individuals then start buying, and the stock’s price skyrockets.
Is Meme stock overvalued?
For this reason, these stocks often become overvalued, seeing drastic price increases in just a short amount of time. “Meme stocks are not a class of investments that’s covered in a textbook—they can be value or growth companies,” said Misty Lynch, financial advisor and certified financial planner with Beck Bode, in an email to The Balance.
Meme stocks like GameStop took off in 2021, and they're showing no signs of stopping. Learn about what meme stocks are, how they work, and if they're a good investment option for you
Nicholas has been a writer for the Motley Fool since 2015, covering companies primarily in the consumer goods and technology sectors. He is also the founder and president of Concinnus Financial, a Registered Investment Advisor based in Spokane, WA. He enjoys the outdoors up and down the West Coast with his wife and their Humane Society-rescued dog.
What are meme stocks, and are they worth the investment?
Meme stocks are a battleground. More traditional investors decry the lack of business fundamentals and strong performance to justify sharp surges in stock price.
Investing in meme stocks and ETFs
Even with meme stocks, the old adage, " Don't put all your eggs in one basket ," still rings true. The good news is that meme stocks come from all nooks and crannies of the stock market, so it's possible to build a diversified portfolio of holdings that can catch a tailwind from various places.
Where does meme stock come from?
In meme stock, the word meme is used in the sense of a cultural item (such as an image, video, or phrase) that is popularly spread on the internet (and often altered in a humorous way). Meme stocks are both like memes (due to their potential for viral popularity) and influenced by memes and internet trends.
Examples of meme stock
Today I sold all my meme stocks, except GME. I will hold a little GME forever just for the memories
Who uses meme stock?
The term meme stock is informal, but it is now used even among professional traders and analysts to refer to stocks whose popularity is largely based on internet trends.
Should I Invest in Stocks?
First, you should develop an asset allocation based on your financial goals. Your asset allocation is your portfolio's blend of stocks, bonds, and cash. Most research suggests that setting up the right asset mix is more important than choosing great investments.
How Do I Pick Stocks?
At Morningstar, we take an owner-oriented approach to stock investing. When you buy a stock, think of yourself as a partial owner of the company. It's important to understand a company's fundamentals before purchasing its shares. We consider three basics when we think of buying shares:
Should I Buy Meme Stocks?
In general, stocks in this category are not what Morningstar considers to be a long-term investment. Instead, meme stocks should be considered from the viewpoint of a short-term trader willing to speculate on a stock's momentum up or down and--importantly--able to weather a significant loss.
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Ruth Saldanha does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies .
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How Does Meme Stock Work?
Meme stock’s popularity is solely due to the online hype. It has little to do with the business fundamentals, performance, or prospects, such as profitability Profitability Profitability refers to a company's ability to generate revenue and maximize profit above its expenditure and operational costs.
Meme Stock Cycle
The meme stocks cycle comprises four phases describing how investors evaluate, invest in, and use them:
Risks
Meme stocks are risky investments due to their tremendous volatility. The price fluctuates based on online forum discussions and the amount of excitement that the stocks generate.
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