Although GameStop’s share price subsequently fell, a fresh rally in May 2024 has sparked renewed interest in the concept of meme stocks. 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. Manipulation on investing subreddits is down sharply in the last two weeks, Rehl noted, adding that there’s no guarantee that the bad actors are gone for good. The HypeEquity founder listed some tips for spotting the difference between memeification and manipulation before naming which meme stocks have had the most loyal fanbases throughout 2021.

GameStop’s 5-Year Share Price Performance

You should always check with the product provider to ensure that information provided is the most up to date. On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. The Motley Fool recommends Dave & Busters Entertainment and Intercept Pharmaceuticals.

How to buy meme stocks in the UK

This suggests it would take more than three full days for short-sellers to exit their positions, should they choose to do so. While some thought that the meme stock craze would be short-lived, the phenomenon remains in force years later. Meme stock communities pumped the brick-and-mortar retailer Bed Bath & Beyond (BBBY) to extreme levels in the summer of 2022, when it was up 314% for a short period before crashing back down. Meme stock activity was given a great boost from bored individuals stuck at home during COVID-19 lockdowns combined with zero-commission brokerage apps like Robinhood. The Robinhood app saw overwhelming trading volume in meme stocks at times, causing multiple trade delays, outages, and platform crashes. This led to user outrage along with class action lawsuits as well as regulatory fines and restitution of approximately $70 million.

1. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.
2. “Over time, just like offense and defense, offense slowly learns what defense doing,” Rehl said, with the “defense” the team of subreddit moderators tasked with keeping forums clean.
3. At the heart of the meme-stock movement is an online investment community known as WallStreetBets (WSB) which uses Reddit to exchange ideas and information about investments.
4. It is about how today’s stock market reflects a new generation of investors, facing economic pressures which are quite different to those of previous generations.
5. Seeing some of these rallies play out, by the shares of  companies with dubious fundamentals, has been remarkable.
6. However, there seems to be little connection between a company’s meme stock status and its actual performance or prospects.

This information is intended to be educational and is not tailored to the investment needs of any specific investor. 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. On ecb just cant escape grip of virus on economy May 10, GameStop was trading below $18 before jumping near $50 by May 14.

GameStop (GME)

That may not sound like much, but Dave & Buster’s only has 42.4 million shares in its float. Meme stocks, however, didn’t truly emerge until the year 2020 via the Reddit forum r/wallstreetbets. Unlike its predecessors and other investing message boards, WallStreetBets became known for its unconventional and often irreverent tone.

You can sell an investment by logging into your investing platform account, tapping the share you want to sell. Before you can buy US shares, you’ll also need to complete a W-8 BEN form. This entitles UK investors a 30% discount on any US tax they pay on dividends from the shares. In recent years, Nokia has pivoted from handsets to telecom infrastructure.

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Memes began to take the form of humorous social media posts and viral videos with the advent of the internet. Meme stocks are so-named because ideas about them spread rapidly on social media and web forums. Meme stocks also see communities built around them that promote the hype and elaborate on the original meme, inventing specific terms and symbols to accompany the stock. Stocks are sold short on margin (because they involve borrowed shares).

If you’re thinking about buying and selling meme stocks, keep in mind that you will probably have to pay taxes on your profits. Capital gains tax rates are especially high on stocks you held for less than a year. Risking money in speculative investments can be exhilarating, but it is rarely the path to long-term wealth. Investing in low-cost index funds and through tax-advantaged retirement accounts such as IRAs has a higher likelihood of success than relying on risky investing strategies.

Meme stocks often have heavier discourse and analysis in discussion threads on websites like Reddit and posts to followers on platforms What are reits like X (formerly Twitter) and Facebook. As noted, the meme stocks phenomenon started in late 2020, when a group of retail investors using the online forum, Reddit, rallied around the US video game retailer, GameStop, causing its value to soar. That said, it’s clear that certain stocks have gained a cult-like following on social media channels. The trading volume of these stocks has been huge, largely due to retail investors who are looking for quick wins.

But the reemergence on May 12 of Roaring Kitty, who had been largely absent from social media and the public eye since 2021, appears to have revived this trade—to some extent. The platform should tell you how many shares this will purchase, and what you’ll be charged in fees. Tax treatment depends on one’s individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice. Investment experts caution that the stock’s latest rally could prove equally short-lived. For example, after peaking at almost $500 in January 2021, GameStop’s share price fell substantially, settling around the $15 to $30 mark by 2022.

These online communities, such as the popular Reddit forum WallStreetBets, coordinate buying and selling efforts to influence stock prices. With enough online support, meme stocks can maintain elevated stock prices regardless of the underlying company’s worth. Those who feel so left behind may instead be tempted by a highly risky investment with a potentially large, rapid payoff – and meme-stocks provide that outlet. If that investment (which may of course end up as a big loss) can help hurt the traditional financial system that many social retail investors feel is against them, so much the better.

That seller must borrow shares from binary options brokers honest reviews somebody who is long the stock in order to sell them. As more and more shares are sold short in this way, there are fewer shares left available to borrow. Once a stock becomes hard to borrow, even the most motivated short seller may be unable to do so. Because many meme stocks are based in the USA, you may be charged a foreign exchange fee.

Late the previous year, an online community of retail investors rushed to buy shares in this struggling video game retailer – GameStop – causing its share price to surge. This demonstrated the collective power of retail investors, and led to the coining of the term ‘meme stock’. Collectively, their independent actions have been shown to initiate short squeezes in heavily shorted names.

Then again, interest expenses totaled 5.6% of net sales in the first quarter, up from just 1.1% of total sales in the first quarter of 2019. Even though retail investors have been putting their money to work in the market for more than a century, we’ve never before seen their efforts to drive up the valuations forex day trading and short term trading techniques in equities translate to such impressive results. “Roaring Kitty” is back, and meme stock investors are once again the beneficiaries. In 2022, Bed Bath & Beyond announced intentions to sell 12 million shares in a secondary offering as meme stock promoters pumped the value of its stock. However, the stock fell steeply following the company’s announcement of the plan.

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However, as a shareholder of Intercept I can also attest that there are justifiable reasons for people to be pessimistic. Food and Drug Administration (FDA) sent the company a Complete Response Letter for obeticholic acid (OCA) as a treatment for nonalcoholic steatohepatitis (NASH). To boot, it’s had a more stringent black-box warning added to Ocaliva, an approved treatment for primary biliary cholangitis. But what might scariest of all is that the company’s balance sheet gives no indication that it’s putting its cash to work on research and development. The entire EV space (cars and ancillary products/services) is dependent on innovation. With acquisitions as its only weapon, Blink Charging will likely struggle over the long run.

Investors Betting Big on Rumble (RUM) Stock

The company produced (drum roll) only $2.23 million in sales during the first quarter (it’s a $1.62 billion company, for context). Comparatively, operating expenses, including compensation, more than doubled, leading to a $7.39 million operating loss. Fidelity is not recommending or endorsing this investment by making it available to its customers. The result has been a collection of stocks featuring unusual trading activity and significant volatility. By checking in regularly, you can review your investment strategy and decide whether to hold, sell or buy more shares.

Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. AMC’s stock closed Tuesday at $6.85 and has risen 135% since Friday, but it’s a far cry from its all-time highs above $300 set in June 2021. GameStop’s stock price has gained 179% over the Asian stock futures past two sessions, though at $48.75 it’s still well below its record of more than $85 in January 2021. Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments.

Stuart Mills does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance.

The former are “bagholders” who made an gbp currency pairs price list and quotes ill-timed purchase and repeatedly post about a stock to boost its price so they can sell it higher, Rehl said. But keeping with the theme of meme stocks, Dave & Buster’s still isn’t out of the woods on an operating basis. Selling stock and taking on debt absolutely helped the company make it through the worst part of the pandemic.

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. Conversations on Reddit about highly manipulated stocks tend to evaporate quickly and seldom repeat, but several meme stocks have loyal, fervent fanbases. The first telltale sign of meme stock manipulation are sudden spikes in posts about a stock that disappear as quickly as they come, Rehl said. Spammers come out of the woodwork, often after previously getting banned, and copy-paste conversations to generate awareness about a stock they want to push, which is atypical for most conversations on Reddit. Stock manipulation on Reddit surged in May, Rehl said, adding that it took time for spammers and bots to learn the intricacies of investing subreddits’ rules and find loopholes.

OG Meme Stocks Still Below 2021 Highs

He is largely attributed as being an originator of the meme stock trend from posts on Reddit and other social media platforms covering companies like GameStop (), AMC (), and some others. His Reddit posts in particular for GameStop, which is widely considered the first meme stock, began attracting a small following of investors in the summer of 2020. Investments in a currency other than sterling are exposed to currency exchange risk.

Others, notably GameStop, remain elevated, although still far lower than its all-time highs. Ultimately, a short seller may run out of available funds to hold on to the short and will be forced to buy back the shares at a higher price and close out the position. 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.

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Then, in January 2021, the short squeeze that The Roaring Kitty had suggested earlier took place in earnest, with the price of GME shares exploding to nearly $500 amid a frenzy of short-covering and panic buying. A meme is an idea or some element of popular culture that spreads and multiplies across people’s minds. Memes gained increasing prevalence and relevance as the internet and social media grew. They allow people to rapidly spread humorous, interesting, or sarcastic videos, images, or posts to others around the world.

1. Meme stocks often have heavier discourse and analysis in discussion threads on websites like Reddit and posts to followers on platforms like X (formerly Twitter) and Facebook.
2. As a result, the meme stock concept adopted a David vs. Goliath or Robin Hood connotation of taking from the rich Wall Street elite and rewarding the small retail investor.
3. This rapid price appreciation caught short sellers off guard, resulting in significant losses estimated at over $1.3 billion in just the two days following Gill’s tweets alone.
4. In recent years, the meme stock trade hasn’t reached the fever pitch that it did back in the winter of 2021.

This raised more than $1.5 billion in the first quarter (Q1) from voracious meme stock buyers. As markets are trading near record highs, the return of this trade has stolen some headlines lately with several meme stock prices surging and plunging. Part of the motivation behind the online support for certain meme stocks comes from hedge funds’ short positions in those companies.

This rapid price appreciation caught short sellers off guard, resulting in significant losses estimated at over $1.3 billion in just the two days following Gill’s tweets alone. A number of retail investors, led by Gill and others, participated in the earlier meme stock craze on the belief that stocks such as GameStop and AMC had become undervalued because of perceived weaknesses in their business models. With the companies’ profits declining, a number of large hedge funds had taken up short positions on these companies, essentially betting that their business models would eventually fail.

Our partners cannot pay us to guarantee favorable reviews of their products or services. To begin with, Reddit investors are often younger, and young people are more likely to demand action be taken to curb climate change. Beyond just pushing away from fossil fuels, ancillary players like Blink Charging will need to step in to help provide the infrastructure for an army of EVs that’ll be hitting the roadways in the coming years. The buzz around GameStop comes just days before the company is set to release its second-quarter financial report. It’s expected to post a year-over-year drop in revenue and a wider net loss.

The US stock market took a tumble early in August 2024 as fears rose of an economic slowdown. Then a few days later calm was restored, reminding us how quickly things can change in the financial world. Meme stocks are actual stocks listed on exchanges and available for trade. However, critics argue that their price performance and appeal have little to do with their fundamentals and much to do with their entertainment value as speculative playthings, much like casino games.