“Meme stocks” refer to shares of companies that have seen a recent surge in viral activity due to their discussion on social media platforms, primarily Reddit. Some of these companies include GameStop and AMC, which have experienced major stock fluctuations due to this.
Recently, these stocks have once again become a popular topic of conversation for several reasons:
1. GameStop announced a sales jump and it’s planning to sell up to 5 million additional shares, which has stirred renewed interest in the company. Plus, the buzz and volatility that began earlier this year never entirely disappeared.
2. AMC, a movie theater chain, has seen its stock rise due to increased vaccination rates and the lifting of restrictions, leading to anticipation of higher sales. However, much of its surge has also been attributed to meme stock activity.
3. On social media, retail investors continue to promote and discuss these stocks, encouraging others to buy and hold onto them in an attempt to drive up prices even more. This phenomenon often occurs in a subreddit called WallStreetBets.
4. Finally, investment apps like Robinhood among others have made it easier for the average person to participate in the stock market, and for novice investors to get caught up in these speculative buying frenzies.
While some people have made profits off these investments, it’s important to remember that mess of them involves significant risk due to their often inflated prices and the potential for large-scale sell-offs. Therefore, potential investors should approach with caution.
