Notice how the stock how to create a successful devops organizational structure jumped from $0.60 to $120.75, then dumped to $15. Whichever ticker symbols are trending or being discussed in groups like r/WallStreetBets become meme stocks. Here are a couple of obvious meme stocks and a couple that you might not even realize are. Here’s what meme stocks are and why they’re seeing renewed interest in 2024.

Should You Invest In Meme Stocks?

In case you haven’t stayed abreast of the meme stock craze, here’s a quick primer. 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. While it can be tempting to get in on a meme stock craze, your money is safer invested in other ways like through index funds. Below, CNBC Select explains these types of investments, plus where you’re likely better off putting your money instead.

Meme stocks often have heavier discourse and analysis in discussion threads on websites like Reddit and posts to followers on platforms like X (formerly Twitter) and Facebook. Where a company’s fundamentals don’t support future share price gains, this could result in deepening your exposure to an asset of little value. It was the gaming retailer GameStop (GME) that drew the most attention. The investment research and financial services firm Morningstar reported that meme stock investing was especially popular with younger investors who shunned traditional investing strategies.

Meme Stocks And Traditional Investing

However, opinions were divided on whether this new surge would have the same lasting impact or if it was simply a brief revival of the speculative fervor that had characterized the earlier event. Regardless, the sudden resurgence of meme stocks in May 2024 served as a reminder of the unpredictable nature of markets and the power of social media to drive investor behavior. Tesla’s CEO, Elon Musk, has also become popular in the meme stock story.

Meme stocks: More than a 2021 phenomenon

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This kind of trading is ultimately not that much different than gambling. With the internet, chat rooms and discussion boards devoted to investing and promoting stocks also arose. In the late 1990s and early 2000s, these sites helped promote and drive up the prices of so-called dotcom stocks—a bubble that famously burst with far-reaching economic consequences. “I support these retail investors, their ability to make a statement,” Gill told The Wall Street Journal in a 2021 interview. Tuesday morning, AMC announced it had raised $250 million off the run-up in its stock value from the near-doubling of its share price Monday (though it was just $3 to $5 per share).

“In some cases, meme-stock investors saw opportunities to react against short sellers who were looking for a stock to decline. Other meme-stock companies from ironfx review the first wave were AMC (AMC), BlackBerry (BB) and Bed, Bath and Beyond. Now in year four of the movement, new meme stocks are being created all the time as individual investors look for new ways to beat the stock market.

BlackBerry’s 5-Year Share Price Performance

I have been writing about all aspects of household finance for over 30 years, aiming to provide information that will help readers make good choices with their money. The financial world can be complex and challenging, so I’m always striving to make it as accessible, manageable and rewarding as possible. By checking in regularly, you can review your investment strategy and decide whether to hold, sell or buy more shares. You can track the value of your investment by logging into your trading account at any time. The platform should tell you how many shares this will purchase, and what you’ll be charged in fees. Once the account is opened and funded, and you’ve settled on an investment strategy, you can buy shares.

Short Squeeze With Meme Stocks

When the initial frenzy began in 2020 and 2021, people were largely at home due to the pandemic and had extra money due to government programs or just increased savings. Another similar short squeeze occurred during the summer of 2022 when meme stock communities price action indicators drove up the price of the Bed, Bath, & Beyond (BBY) shares by 314%. A meme stock is a stock that has gone viral online, drawing the attention of retail investors. Buying stocks guided by a meme internet culture may be done to make a profit or to make a point.

• Unfortunately, as we are also seeing right now, it can have dire consequences in the long run.
• Meme stocks are popular in part because they can result in a big win over a short period of time.
• I’ve been writing for a broad array of online publications for four years, always aiming to make important insights accessible.
• That’s a type of emotional buying that may cause you to make decisions you’ll regret.
• References to specific company stocks should not be construed as recommendations or investment advice.

Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. Ironically, this action actually reduces the value of shares held by the speculators. Fueled by online forum discussion, especially on Reddit, Cohen attracted an army of believers in his strategy that sent the value of GameStop stock to as high as $81.25 after never breaking $14 a share.