If you play in the crypto world, you must have heard about meme coins but what about meme stocks? Sounds new or have you heard about it?
Well, in this post, you’ll have an understanding of meme stocks and some examples. Let’s get to it.
What are Meme Stocks?
A “meme stock” is a stock that experiences a rapid and often unpredictable increase in value, driven largely by social media activity, online forums, and collective investor sentiment rather than fundamental financial analysis. These stocks gain popularity and momentum through online communities like Reddit, where users discuss and share information about potential investment opportunities.
The term “meme stock” gained prominence during the GameStop (GME) saga in early 2021. Retail investors, coordinated through online platforms like Reddit’s WallStreetBets, collectively decided to invest in GameStop shares. This led to a significant surge in the stock’s price, causing hedge funds with short positions in GameStop to face substantial losses. The phenomenon highlighted the power of social media in influencing financial markets and demonstrated the potential for a large group of individual investors to impact stock prices.
Examples of Meme Stocks
- GameStop (GME): The GameStop saga in early 2021 is one of the most well-known examples. Retail investors on platforms like Reddit’s WallStreetBets drove the stock price to unprecedented levels, causing significant disruptions in the financial markets.
- AMC Entertainment (AMC): AMC, a movie theatre chain, became another meme stock in 2021. Retail investors rallied behind the stock, driving up its price, and it also became a focal point in discussions about short squeezes and retail investor activism.
- Nokia (NOK): Nokia experienced a surge in its stock price in early 2021, fueled by social media speculation and discussions. However, the momentum was relatively short-lived.
- BlackBerry (BB): Like Nokia, BlackBerry saw increased trading activity and volatility as retail investors on platforms like Reddit expressed interest in the stock.