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

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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.

Choose the criteria. See stocks that match.

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.