Meme stocks: What are They and Why You Should Be Careful Buying Them

GameStop followed suit in 2021, raising nearly $1.7 billion via a secondary offering of 8.5 million additional shares at an average price of more than $200 per share. While Trump delayed the ban of TikTok, users still reported issues with trying to download the app from the Apple and Google app stores. Russian forces have entered the Donetsk Oblast town of Velyka Novosilka, according to Russian and Ukrainian sources. The settlement is Ukraine’s last major stronghold in the southern Donbas region.

Pink Sheet Stocks Meaning

Owning one can be anxiety-provoking, too, as you watch the stock price zoom up and then plummet. This article explores the meaning of a meme stock, what causes it and what are its likely consequences for the investor. This Canadian company is known for pioneering the smartphone, but it quickly went by the wayside when Apple revolutionized the space. These days, Blackberry is a software firm that provides endpoint security software and other Internet of Things management products for customers such as the auto industry.

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But crypto analytics platform Bubblemaps flagged “suspicious trades” on the meme coin, pointing to addresses that scooped up millions of dollars of the token in its first minute of trading. Regulatory scrutiny is another pivotal element, as Trump’s high-profile association with the coin is likely to attract attention from regulators, potentially influencing the trajectory of meme coins and broader crypto regulations. Finally, broader adoption will play a crucial role; if $TRUMP continues to gain traction, it could spark similar projects, further embedding cryptocurrency tron current price 0 06 usd into mainstream culture.

• A single X post about GameStop has generated tens of millions of views, as of mid-May, and the price action has been just as notable.
• But the highest gain went to a $270,000 position, which garnered a 19,000% return.
• The stock has fallen back to Earth and trades at around $20 per share.
• But all bubbles tend to burst, causing prices to drop suddenly, meaning you could make a loss or be left holding the bag if you don’t sell at the right time.
• One of the cases of meme stocks 2021 was that of the gaming merchandise retailer GameStop.
• If it does, you can repurchase the shares at the lower price, return them to the brokerage and keep the difference as profit.
• Twitter, Vine’s parent company, eventually shuttered the platform in 2017.

But, as many traditional investors and analysts point out, these viral stocks can be very risky since they rely on high interest from small investors to sustain the stock prices’ liftoff “to the moon.” Meme stocks have been a boon to investors, day traders, and brokerage platforms but companies have also capitalized on the meme stock phenomenon. As a result of sky-high prices and persistent demand for shares among individual investors, AMC Theaters CEO Adam Aron took advantage of the elevated valuation and engaged in a series of secondary (follow-on) offerings in 2021. This raised more than $1.5 billion in the first quarter (Q1) from voracious meme stock buyers. Meme stocks rose to prominence in early 2021 during the Reddit short squeeze event.

Terms connected to meme stocks

Once the account is opened and funded, and you’ve settled on an investment strategy, you can buy shares. It also means that, rather than waiting to build up a lump terafx brokers fees forex spreads leverages and commissions sum, investors’ money can gain market exposure right away. Many of the most popular providers allow users to open and manage their account online or via an app. 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. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive payment from the companies that advertise on the Forbes Advisor site.

Ukrainian President Volodymyr Zelenskyy said Saturday the U.S. has not stopped military aid to Ukraine after newly sworn in U.S. Secretary of State Marco Rubio announced he would pause foreign aid grants for 90 days. The National Highway Traffic Safety Administration said it would delay the effective date to March 20 to give the new Trump administration time to further review the regulation. President Trump walked through a casino floor Saturday shortly following a speech at the Circa Resort and Casino in Las Vegas, delighting supporters. Trump needs to keep churning the attention machine to drive interest in the stuff he wants to sell his supporters.

Are Meme Stocks Real Investments?

• The president on Tuesday tried to play both dumb and triumphant about his new coin when asked at the White House if he would keep selling products for personal benefit as president.
• Gordon Scott has been an active investor and technical analyst or 20+ years.
• This means that the Reddit Rebellion was likely a once-in-a-lifetime opportunity.
• Meme stock investing relies on trying to time the market, which humans, even those professionally trained, are notoriously bad at.
• We have members that come from all walks of life and from all over the world.
• Unlike cryptocurrencies designed for decentralized finance (DeFi) or smart contracts, $TRUMP is fundamentally a meme coin.

NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. 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. If you own a stock with these types of characteristics, it doesn’t mean that they will become part of the meme stock trade.

“It’s just like wearing the trendiest clothes or knowing the latest viral challenge, people use social media as a way to connect and get views,” said Giles. “Hearing the latest stock trend is fun and makes people feel like they are ‘in the know.’ It also makes people dream about what it would be like to get rich. A member of the hot 2020 IPO stock class, Palantir quickly gained a large investor following after making its public debut. The company builds enterprise big data and AI software that helps organizations update their operations for a digital era. Palantir has concentrated exposure working for government entities, but it’s quickly working to expand further into the private sector.

Part of the meme stock’s appeal is the opportunity to battle such institutional short-sellers by backing what’s perceived as a plucky underdog. However, there seems to be little connection between a company’s meme stock status and its actual performance or prospects. In true viral fashion, meme stocks rapidly became a thing in the early part of 2021. The stocks mentioned are not necessarily holdings invested in by Fidelity.

Moreover, ethical concerns have been raised about a former U.S. president launching a meme coin, with critics questioning the appropriateness of leveraging a speculative asset tied to a political figure. These issues highlight the complexities and controversies surrounding $TRUMP’s emergence in the crypto space. The launch of $TRUMP brings several positives to the cryptocurrency space. First, it has brought massive visibility to the meme coin sector and decentralized exchanges, drawing attention from new audiences and driving interest in decentralized trading platforms.

If many shorts are forced to cover at once, it adds additional upward pressure on the stock’s price as they are all forced to buy the stock and cover at ever higher prices. This is known as a short squeeze, and it accelerates a stock’s price increases as more and more short sellers are forced to bail out to cut their losses. After the initial meme stock craze, GameStop shares drifted steadily lower, settling at just over $10 a share by the Spring of 2024. However, in mid-May of that year, the stock experienced a sudden resurgence, fueled by the return of Keith Gill, aka “Roaring Kitty,” to social media. Cryptocurrencies have made headlines for years, but recent developments, including the launch of Donald Trump’s $TRUMP token, have thrust the world of meme coins into the spotlight like never before. Whether who is a devops engineer a complete guide to the devops engineer role you’re new to crypto or a seasoned observer, this article provides a neutral, accessible guide to understanding $TRUMP, meme coins, and their broader implications.

Both prices and trading volumes of meme stocks may be exceptionally volatile, as the hype on platforms like Reddit can cause spikes in demand. The price performance of meme stocks is generally not based on changes in the underlying company’s fundamentals or financial performance. Simply put, meme stocks skyrocket in price in a short period (often hours or days) because of a sudden surge in interest online or on social media and subsequent buying among small individual investors. These short-term surges can often reverse course just as quickly, though, making meme stocks far more volatile than average stock market moves. Meme stocks became all the rage among retail investors during the COVID-19 pandemic. Meme stocks are created when a company’s shares catch fire with individual investors on social media platforms such as Reddit and quickly skyrocket in price.