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The company’s share price jumped 16% in May 2024 – likely in response to Keith Gill’s return to social media, and is now trading around $3.20. However, due to the supersonic inflation of Supermicro stock, any pullback in the share price should be welcomed by investors with a long investing horizon. ” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume. The answer is the same for the question, should you invest in technology stocks, consumer staples stocks, or any other stock sector? And with meme stocks, it can depend on why the stocks are catching traders’ attention.
Choose your investing strategy
To the extent any recommendations or statements of opinion or fact made in a story may constitute financial advice, they constitute general information and not personal financial advice in any form. As such, any recommendations or statements do not take into account the financial circumstances, investment objectives, tax implications, or any specific requirements of readers. Forming the backdrop to the exceptional circumstances of GameStop was a cryptocurrency rally that ultimately saw Bitcoin (BTC-USD) reach an all-time high value of $69,000. That crypto rally played a key role in igniting the interest of individuals keen to embrace the world of investing without having to conduct deep market research or wait longer for a substantial return on investment (ROI). Meme stocks rely on the fear of missing out (FOMO) and short-squeezes to accelerate and maintain their altitude.
- The rally in the stock market in 2023 may set the stage for another meme stock rally.
- These studies show the wide variance of the available data on day trading profitability.
- Many astute retail traders figured if GME shares were to rally, it could cause a crazy short squeeze as the overcrowded short side would be forced to cover to avoid taking large losses.
- Meme stocks are closer to penny stocks than blue-chip stocks and don’t pay dividends.
- The stock was heavily shorted back in early 2021, which created the conditions for a short squeeze when retail investors piled into the stock, forcing institutions to buy back shares at a premium.
Bitcoin and Ethereum ETFs: Revolutionizing Investment Strategies Amid Institutional Adoption
Before getting involved, investors should ask if this dip is just a matter of price discovery or if it indicates a larger problem with the company. Based on a consensus price target that is still at $185.90, this looks like a time to wait for the price to go down and buy the dip. So if you sell the stock you borrowed for $10, and then its price rises to $50, you’re responsible for those shares, meaning you’re on the hook for that $40 you owe the broker. If you want to invest in meme stocks, or any stocks for that matter, you’ll need to open a brokerage account first. These cultural moments amplify the speculative nature of meme coins, leading to rapid price swings based on public sentiment.
But so far, the rally hasn’t had the same momentum—GME’s price tumbled again within the same week and it remains well below its 2021 highs. In addition to this, the concept of space tourism is more likely to resonate with retail investors as an exciting uncharted industry that’s unfamiliar territory for institutions with intentions to short the stock. Although we recently saw Roundhill’s MEME ETF shut down due to flagging investor interest, it’s important to acknowledge that recent economic headwinds have forced investors to look away from riskier stocks. Despite this, there have been many cases of meme stock opportunities.
This is an issue to watch before you put money into a company that is currently not profitable. On the other hand, many states will have to tread carefully not to bite on the hands that feed them. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Rivian is currently in the midst of “production hell,” a phrase coined by Tesla CEO Elon Musk when his company was trying to ramp up factory production to stem cash losses. Rivian has had hiccups scaling its R1T electric truck production, but it’s making progress.
GameStop’s 5-Year Share Price Performance
The following three meme stocks are companies that shouldn’t be ignored. They are companies that pick up a following in internet chatrooms or social media and take off from there. Forums such as r/wallstreetbets now boasts 16 million members (though far fewer are active), and many retail investors are still turning to social media to inform their investment decisions.
- Investing in meme stocks is inherently riskier than traditional stock picking since meme stocks trade on stories, not financial data or valuation metrics.
- These short-term surges can often reverse course just as quickly, though, making meme stocks far more volatile than average stock market moves.
- A key component of discussions includes famous imagery or video, overlayed with humorous wordplay.
- These stocks often gain popularity and attention from individual investors, driven by online communities and platforms such as Reddit or X.
- Others, such as AMC, are now even lower than their pre-pandemic values.
- Stay up to date on all meme stocks with Benzinga Pro, your go-to stock market research platform with real-time news and actionable insights.
In comparing various financial products and services, we are unable to compare every provider in the market so our rankings do not constitute a comprehensive review of a particular sector. While we do go to great lengths to ensure our ranking criteria matches the concerns of consumers, we cannot guarantee that every relevant feature of a financial product will be reviewed. However, Forbes Advisor Australia cannot guarantee the accuracy, completeness or timeliness of this website.
Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Furthermore, the stock already experienced a boost from meme investors as the firm began flying its first commercial passengers into space in June 2023. Meme stocks are a part of the new investment world and are always an interesting topic to revisit.
Can I make money with a meme stock?
Some of the more popular meme stocks, such as GameStop, continue to enjoy higher stock prices than before the short squeezes in 2021. Others, such as AMC, are now even lower than their pre-pandemic values. Without their cult followings, meme stocks are not necessarily valuable assets. These online communities, such as the popular Reddit forum WallStreetBets, coordinate buying and selling efforts to influence stock prices. With enough online support, meme stocks can maintain elevated stock prices regardless of the underlying company’s worth.
Which stock will be the next GameStop?
” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability. On the date of publication, Dmytro Spilka did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
For example, one commenter noted that CNBC’s analysis of DraftKings considered DraftKings a buy because, in its words, gen Z and millennials are a bunch of degenerate gamblers. Whether it’s in relation to SpaceX, Dogecoin (DOGE-USD), Shiba Inu (SHIB-USD), or Tesla itself, Elon Musk is a very meme-worthy individual. The process involves extracting a patient’s T-cells and modifying them to produce specific receptors on the outside known as chimeric antigen receptions (CARs). These CARs are multiplied in heavy quantities in a lab and re-infused into the patient’s body.
BlackBerry, the Canadian brand behind the popular 2000s smartphone, has been struggling for over a decade, progressively losing market share to Apple’s iPhone. The trend emerged as lockdown measures kept would-be investors at home, commission-free trading apps such as Robinhood entered the scene and US citizens were deciding how to spend their Covid-19 government stimulus cheques. Legendary investor Warren Buffett offered an observation on market behavior in his 2023 letter to Berkshire Hathaway shareholders. But traders should keep in mind that even after their recent surge, GameStop shares are still down about 75 percent from their 2021 peak. Enter your email address and we’ll send you MarketBeat’s list of ten stocks that will drive in any economic environment. MSTR shares have been highly correlated with the price of Bitcoin for most of 2024, and that trend is likely to continue with a more crypto-friendly government entering the picture.
Meme stocks are low-priced stocks that ran up in price for no particular fundamental reason other than short-squeezes perpetuated by retail investor enthusiasm and social media hype. The ridiculous nature of the underlying price move exposed it to ridicule with clever memes that would gain popularity and go viral. Meme stocks are closer to penny stocks than blue-chip stocks and don’t pay dividends. Investments in a currency other than sterling are exposed to currency exchange risk.
