Meme stocks: What are They and Why You Should Be Careful Buying Them
Short selling is when somebody sells shares that they do not own, hoping to buy them back at a lower price. That seller must borrow shares from somebody who is long the stock in order to sell them. As more and more shares are sold short in this way, there are fewer shares left available to borrow.
Pros of meme stocks
Experts generally suggest keeping individual stock picking limited to 5% to 10% of your overall investment portfolio. When you’re ready to buy stocks, your first need to open a taxable brokerage account. Robinhood and Webull are two popular trading platforms for active investors, boasting easy-to-use mobile investing apps.
One of the biggest threats is the potential for graft-versus-host disease (GVHD), where the donated T-cells attack the patient’s differences between enterprise architects solution architects and technical architects healthy cells as it views them as foreign. ALLO shares reached a high of $55 in May 2020 and fell to a low of $4.30 in June 2023. The rally in the stock market in 2023 may set the stage for another meme stock rally. While everyone is searching for how to find the next meme stock, we have a list of six that could be the ones. These 10 simple stocks can help beginning investors build long-term wealth without knowing options, technicals, or other advanced strategies. Meme stocks exhibit several defining characteristics that differentiate them from traditional stocks, shaping the dynamics of their trading and investor sentiment.
Is the Meme Stock Craze Over?
- The sorts of short squeezes and parabolic moves that have proliferated really defied the rules of theoretical finance.
- Meme stocks aren’t a specific sector or stock type, but a loosely-tied group of securities paraded about by social media influencers, retail investors, and pot-stirring CEOs.
- Shares of GameStop closed up 21% to $28 after jumping above $40 right after the opening of trading.
However, it was Nokia’s following on forums such as Reddit’s WallStreetBets which really galvanized many investors to pile into this name. For those still itching to trade the next viral stock, invest only with money Safe stocks to buy for beginners you can afford to lose. There’s a good chance you have seen the term «meme stock» splashed across headlines before — even if you aren’t actively following business news. The offers that appear on this site are from companies that compensate us. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Why is it called a meme stock?
GameStop was a dying video game retailer, one of the last ones standing. GameStop stock had a 140% short interest, making it highly susceptible to a short squeeze, akin to lighting a match in a kerosene-soaked warehouse. However, that victory was short-lived as meme stocks deflated as quickly as they inflated during the bear market 2022. As the smoke clears and the stock market recovers in 2023, retail traders wonder what the next meme stock will be that spawns another meme stock mania.
What the Latest Craze Says About Investor Behavior
This social sentiment is usually due to activity online, particularly on social media platforms. These online communities can dedicate heavy research and resources toward a particular stock. Meme stocks often have heavier discourse and analysis in discussion threads on websites like us dollar to hungarian forint exchange rate Reddit and posts to followers on platforms like X (formerly Twitter) and Facebook.
Perhaps the most famous in recent history was the WallStreetBets Reddit thread that encouraged people to buy GameStop and AMC Entertainment stock at the beginning of 2021. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products.