Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. GameStop may have started the meme stock mania, but others have followed in its footsteps. Below are the five best-performing stocks in the Solactive Roundhill Meme Stock Index, ordered by one-year returns. Allogenic CAR-T is also called “off-the-shelf,” where other T-cells are donated rather than a patient’s, allowing for speedier and more consistent treatment.
Are Meme Stocks a Smart Investment Choice?
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. Here are five to do some more digging on (beyond arguably the two most famous meme stocks — video game retailer GameStop (GME 0.29%) and the world’s largest movie theater chain AMC (AMC 1.34%). The GameStop saga was a combination of bored and nostalgic retail investors, massive short interest, pandemic-related stimulus money and a social media community going viral. The conditions required to create another substantial short squeeze like that may never materialize again, but it certainly isn’t the end of short squeezes (or anger at hedge funds). That said, it’s clear that certain stocks have gained a cult-like following on social media channels.
Named after the virality of internet memes found on social media, these stocks saw online communities form around them to boost and hype their prospects, even though meme company fundamentals remained questionable. Investing in meme stocks may provide short-term gains due to sudden price increases spurred by social media. Some investors appreciate that meme stocks give retail investors a chance to influence markets.
How meme stocks work
Even GameStop can’t be the next GameStop stock with just a 16.95% short interest repeating what happened at the dawn of the meme stock bubble. The next GameStop stock will have to have more than a 100% short interest. Meme stocks rose when rates were low, stimulus money was flowing and Americans were spending most of their time at home while COVID ran wild.
Why Are They Called Meme Stocks?
Shares of GameStop soared more than 110 percent in early trading Monday after Keith Gill, who the future of value stocks goes by Roaring Kitty on social media sites X and YouTube, posted for the first time in three years. Shares of other popular “meme stocks” such as movie theater chain AMC Entertainment were also higher, harkening back to the frenzied pandemic trading of 2020 and 2021. A short squeeze is a relatively rare event that can yield eye-popping profits for people riding the wave.
- 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.
- For those still itching to trade the next viral stock, invest only with money you can afford to lose.
- The best meme stocks to buy are usually beaten-down companies with a small market cap and a high percentage of shares sold short.
- The company has seen declining sales and has pushed back its 10-K report, and received a non-compliance listing notice from the New York Stock Exchange on June 7, 2023.
Discover 20 high-yield dividend stocks paying an unsustainably large percentage of their earnings. Enter your email to get this report and avoid a high-yield dividend trap. Charles Schwab why invest in fixed income investments has funds that are straightforward options with no investment minimum.
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. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange forex currency trading at tradeview forex delays and terms of use please see Barchart’s disclaimer.
In general, many of the meme stocks that saw sky-high stock prices in 2021 have come down significantly in 2022. They are often now trading below where they started before the meme frenzy. Others, notably GameStop, remain elevated, although still far lower than its all-time highs. Part of the challenge in explaining the price movements of meme stocks is that the change in share price can’t be explained by the fundamentals of the underlying businesses. GameStop’s sales fell about 11 percent in its 2023 fiscal year compared to 2022 and fell nearly 20 percent during its fourth quarter. The company earned just $6.7 million in net income in 2023, which is far from justifying its market value of over $9 billion.