Meme Stocks Definition

That is when stock in a heavily shorted company rises creating losses for short sellers and a rush to buy back borrowed stock all at once feeding additional price gains.

Meme stocks definition. Meme Stock Definition and Example Meme Stock Meaning Stock Market Terms Related Terms Means. High short interest is a. A meme stock is any stock thats seen excessive trading volume from retail investors whove targeted it on social media.

They wont be found in textbooks anytime soon but to overlook their impact could potentially be an expensive oversight. Meme definition is - an idea behavior style or usage that spreads from person to person within a culture. Sometimes represented by a gorilla emoji the saying is derived from an earlier meme based on the movie Rise of Planet of the Apes.

While theres no steadfast definition of what constitutes a meme stock one common thread across the many names being pitched on social media is a focus on heavily shorted companies. Any publicly traded company stock that keeps going up and disregards the fundamentals such as revenue and profits when valuing the underlying company. Using this data for investing purposes concedes that you are intellectually deficit as no one should be using memes for investment advice.

This behavior of memes emulates that of stocks or cryptocurrencies which follow a similar risk-return trade-off pattern based on the type of stock or project one invests in. A meme stock is a stock that has seen an increase in volume not because of the companys performance but rather because of hype on social media and online forums like Reddit. With meme stocks meme culture has finally hit Wall Street.

The Meme Governing Equation. Hence any stock that goes up in value beyond most peoples imagination is labeled as a meme stock. To fill the appetite of nerds and number-savvy individuals the dankpaper also talks in detail about the investment return function of memes.

Theyre often users of Reddit and Robinhood a commission-free investment app that isnt available in Australia and the stocks of choice generally ones with single digit prices that are shorted. You should not use the information on this page for investing. A meme stock is a stock that becomes renown or notorious based on its product merit or its graphs.