Meme stocks

What are Meme Stocks?

Meme stocks can be described as shares of a company that experience high price volatility and trading volumes as a result of social media attention in contrast to conventional trading techniques. Meme stocks defy normal trading patterns and are instead guided primarily by online subreddits and retail buyers.

Characteristics of Meme Stocks

Popularity: As a result of a meme going viral on social media, video platforms, or other channels, meme stocks become more well-known which often leads to a frenzy of stock trading or even increases stock prices.

High Volatility: A meme stock is a high-risk and volatile investment because its price can fluctuate significantly within a relatively short period, generally due to a horde of retail investors buying shares at once leading to high demand for the stock.

Disconnect from Company Fundamentals: Meme stocks are various corporate stocks that do not seem to represent the underlying value or financial health of the company in question. Their only determinant is memes or other aspects that excite the market and not the company.