In some ways, getting wind of a meme stock is akin to hearing about it from a friend or relative, who may or may not have investing experience. There is no guarantee that any of these stocks, or other meme stocks to come, will generate returns. Other companies that have become meme stocks to varying degrees include Plug Power (PLUG), Virgin Galactic (SPCE), Palantir (PLTR), and BlackBerry (BB). In true viral fashion, meme stocks rapidly became a thing in the early part of 2021. 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.

No offer to buy securities can be accepted, and no part of the purchase price can be received, until an offering statement filed with the SEC has been qualified by the SEC. An indication of interest to purchase securities involves no obligation or commitment of any kind. A meme stock is any publicly traded stock with a price performance that’s strongly influenced by activity on social media.

Meme Stocks: What They Are and 5 Top Stocks for September 2024

Unlike with traditional stocks you may invest in, the price performance of a meme stock is generally not based on the company’s underlying fundamentals. Treasury Accounts.Investing services in treasury accounts offering 6 month US Treasury Bills on the Public platform are through Jiko Securities, Inc. (“JSI”), a registered broker-dealer and member of FINRA & SIPC. See JSI’s FINRA BrokerCheck and Form CRS for further information.JSI uses funds from your Treasury Account to purchase T-bills in increments of $100 “par value” (the T-bill’s value at maturity). The value of T-bills fluctuate and investors may receive more or less than their original investments four trading questions you should ask your forex broker if sold prior to maturity. T-bills are subject to price change and availability – yield is subject to change. Investments in T-bills involve a variety of risks, including credit risk, interest rate risk, and liquidity risk.

What is the main appeal of meme stocks?

Investors who can no longer maintain their positions due to growing losses and borrowing requirements may begin buying how does an ira grow over time back the shares they shorted to limit the amount of money they stand to lose. However, buying these shares can increase demand and push the stock price up, effectively starting a short squeeze. But meme stocks differ from everyday stocks in their connection to social media. A meme stock typically becomes popular on social media, which may draw investors to the stock and potentially increase its value. For one, in cases like Game Stop or Bed, Bath and Beyond, the price of shares can rise tremendously based exclusively on online narratives and not on the fundamental valuation of the stock. Bankrate.com is an independent, advertising-supported publisher and comparison service.

Bonds.“Bonds” shall refer to corporate debt securities and U.S. government securities offered on the Public platform through a self-directed brokerage account held at Public Investing and custodied at Apex Clearing. The value of Bonds fluctuate and any investments sold prior to maturity may result in gain or loss of principal. In general, when interest rates go up, Bond prices typically drop, and vice versa.

Where Are the Meme Stocks Today?

If your goal is to buy a house, save for retirement, or otherwise increase your financial security, you might consider a fundamentals-based investing strategy that isn’t guided by Reddit, TikTok, or any other media platform. One of the features of meme stocks, especially early on, has been that they tend to be heavily shorted names. This means that there is a lot of short interest in the stock, or that a large proportion of the company’s outstanding shares have been sold short. Whether you should invest in meme stocks depends on your investment experience and risk tolerance.

“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. For privately held companies, corporate value stems from the bottom line.

The brain trust at Forbes has run the numbers, conducted the research, and done the analysis to come up with some of the best places for you to make money in 2024. Roaring Kitty’s real name is Keith Gill who was also on Reddit as u/deepF…Value and active on the subreddit r/wallstreetbets.

Bonds with higher yields or offered by issuers with lower credit ratings generally carry a higher degree of risk. All fixed income securities are subject to price change and availability, and yield is subject to change. Bond ratings, if provided, are third party opinions on the overall bond’s credit worthiness at the time the rating is assigned. Ratings are not recommendations to purchase, hold, or sell securities, and they do not address the market value of securities or their suitability for investment purposes.

Bankrate logo

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances.

Betting on undervalued stocks

But meme stocks are often connected to companies that aren’t as profitable, at least at the time. They can be companies that were more popular years ago, which can create a nostalgic feeling for social media users. The name is lent to this particular kind of stock as the shares earning the title have been chosen and widely discussed in online communities. The first meme stock is largely considered to be struggling gaming company GameStop, which in early 2021 rose sharply in price as members of the sub-thread “r/wallstreetbets” on Reddit orchestrated a massive “short-squeeze.”

1. However, a short squeeze can occur when those borrowed stocks rise in price rather than fall.
2. Legendary investor Warren Buffett offered an observation on market behavior in his 2023 letter to Berkshire Hathaway shareholders.
3. Bankrate.com is an independent, advertising-supported publisher and comparison service.
4. The Robinhood app saw overwhelming trading volume in meme stocks at times, causing multiple trade delays, outages, and platform crashes.
5. One peak does not necessarily mean there will be more, but its possible.
6. Meme stocks may also be stocks that many investors are short selling, which means these investors are betting the stocks in question will drop in value.

Roundhill Investments came out with a meme stock-focused ETF in December of 2021 under the ticker symbol ‘MEME’. MEME features an equal-weighted portfolio of 25 stocks based on social media popularity and market sentiment. The top 25 such firms are included in the portfolio, which is re-examined and rebalanced twice a month. Meme stocks have been a boon to investors, day Top gene sequencing stocks for 2021 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.

We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.

A short squeeze is when a shorted stock’s shares rise sharply in price and buyers close out to avoid losing big. But people trade stocks for many reasons, not all of them supported by sound financial logic. A single social media post from Roaring Kitty may ignite the animal spirits that were in place during the pandemic, causing people to rush to buy shares of the same stocks to ensure they don’t miss out on potential gains.

To learn more, see our Public’s Fee Schedule, Order Flow Rebate FAQ, and Order Flow Rebate Program Terms & Conditions. The WallStreetBets subreddit has 10.2 million readers and counting. This platform fuels the masses to follow trends in rallying behind a stocksometimes to no apparent end.