The phrase “meme stock” has become increasingly popular in recent years and refers to a stock that experiences rapid and often unexpected share price growth due to the attention of an active online following. Meme stocks usually start with a small group of traders who cause a short squeeze and cause the stock to quickly gain attention on social media platforms and online forums like Reddit, WallStreetBets and Robinhood.
The trend of meme stocks started in 2021 when investors bought up shares of the online video game retailer GameStop. Other popular meme stocks include Bed Bath & Beyond (BBBY), AMC Entertainment (AMC) and Blackberry (BB). Despite occasional dips in 2021 and 2022 due to rising rate worries and share market crash, the trend has been on the rise again in 2023 due to a renewed risk-on sentiment and a turnaround in the cryptocurrency and technology market.
Analysts believe that the impulse of meme stocks has not gone away completely, and some of them could see a revival. Dave Briggs recently commented on the two year anniversary of meme stocks, saying, “It started in January of 2021 with investors buying up shares of video-game retailer GameStop. Retail traders would also get on to buying shares of AMC and Bed Bath & Beyond at wild rates.” As meme stocks continue to become more popular, investors should be aware of the risks and rewards before investing.
0. “What are Meme Stocks and How do you Trade or Invest in them?” IG International, 1 Feb. 2023, https://www.ig.com/en/trading-strategies/what-are-meme-stocks-and-how-do-you-trade-or-invest-in-them-230131
1. “ETF in Focus on Meme Stock Mania's Two-Year Anniversary” Yahoo Life, 30 Jan. 2023, https://www.yahoo.com/lifestyle/etf-focus-meme-stock-manias-190007539.html
2. “3 Meme Stocks With the Most Potential for a Major Comeback” InvestorPlace, 30 Jan. 2023, https://investorplace.com/2023/01/3-meme-stocks-with-the-most-potential-for-a-major-comeback/