This is what we can expect to see from meme stocks in 2024
Meme stock mania may serve a purpose, because it gets people interested in the stock market. If they turn that interest into real learning, this can help people build wealth. But individuals must understand that meme stocks aren’t the same as investments, https://bigbostrade.com/ and they must take responsibility for always improving their knowledge, skills, and analysis. It seems unlikely that meme stocks will disappear anytime soon, but it’s not too late for people to learn how to invest for the long term.
The short interest climbed on a bearish report released by Hindenburg Research, which sent shares falling by nearly 40% before surging through its yearly highs, peaking at $48.87 in June 2023. Despite its partnerships with well-known fast and casual restaurants, sentiment turned sour as the competition crawled out of the woodwork, diluting its market share. The supply chain disruption during the pandemic also impacted operations. The company has not profited in its operating history since its launch in 2009.
- There are plenty of options online to buy meme stocks, but the most accessible are typically brokers like Robinhood and Webull.
- VanEck Social doesn’t own BBBY stock either, but does have positions in some larger firms like Apple (AAPL).
- MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on…
- And don’t fool yourself into thinking there’s a fundamental story for any of these stocks.
- It connects borrowers with lenders, including more than 60 banks and credit unions, to find the right match.
Shares of the movie-theater chain and original meme-stock darling have hit a series of record lows recently. The stock ended Friday’s session at another record-low close, extending its losing streak to five days. The recent decline in AMC’s share price is “so frustrating,” according to the movie-theater chain’s CEO, Adam Aron. It’s quite obvious that $GME shouldn’t be considered a serious investment. It has absolutely nothing to back its value and has no use cases. That doesn’t mean you can’t make money from it, although the risks of a sudden price decline are very real.
What exactly are meme stocks?
As of May 28, a little over 7.8 million shares of the company were held short. That may not sound like much, but Dave & Buster’s only has 42.4 million shares in its float. By contrast, a legitimate meme stock movement is typically accompanied by a slow rise in posts and interest that catches fire and takes off, like with GameStop in late January. But lesser-known investing subreddits can be plagued by manipulators like spammers and bots. The former are « bagholders » who made an ill-timed purchase and repeatedly post about a stock to boost its price so they can sell it higher, Rehl said. They’re « not a bad person, they’re just in a bad spot, » he added.
Meme Stocks: What They Are and 5 Top Stocks for January 2024
Even with meme stocks, the old adage, « Don’t put all your eggs in one basket, » still rings true. The good news is that meme stocks come from all nooks and crannies of the stock market, so it’s possible to build a diversified portfolio of holdings that can catch a tailwind from various places. The word « meme, » from the ancient Greek word « mimema » — meaning imitation — is used to describe information that is imitated and often spread via pop culture references on social media. Thus, a meme stock is a shared investing idea imitated by other investors. Until August, Cassava Sciences was one of the top meme stocks, zooming higher thanks to the potential of its Simulfilam Alzheimers drug candidate.
One example is the VanEck Social Sentiment ETF (BUZZ -0.06%), an actively managed portfolio of 75 stocks that rank high in social media conversations. Top holdings in the portfolio include GameStop, AMC, and Palantir. This ETF has an annual expense ratio of 0.75% (meaning it costs $75 per year for every $1,000 invested). Because a surge in buying activity can send a stock price soaring, there are some benefits to owning meme stocks (and potential meme stocks before they rocket higher). When online investors understood the short positions against GameStop, people took it on as a Robin Hood-like adventure (often using the trading app Robinhood to do so).
Using ETFs For Meme Stocks
Given its cyclical nature, chances are CLF stock will continue to sport a single-digit price-to-earnings (P/E) ratio. Even so, as a move from a 3.5x to 7x would still result in a 100% gain for shares, the risk/reward proposition with this situation looks tilted in your favor. AMC’s recent market performance reflects the demise of the movie-theater chain’s meme-stock status.
Insider has interviewed investing pros who have simple strategies for spotting meme stocks, as well as the creator of a site that saves investors time by scanning Reddit forums for the next big meme stock. While it is possible to make money with meme stocks, it is an extremely risky venture. Meme stock investing relies on trying to time the market, which humans, even those professionally trained, are notoriously bad at. It also depends on knowing which stocks will pop and which won’t — which is essentially impossible. Yet while it did join in on the fun during the short squeeze-centric second meme stock wave, after first plunging due to the spring SPAC wipeout, it’s been tough for Virgin Galactic investors since then. This is due to several factors, including selling by insiders like Chamath Palihapitiya, and delays in its commencement of commercial flights.
As a result, hordes of investors started buying GameStop stock, making it very expensive for the hedge funds to buy back from their short positions. If it does, you can repurchase the shares at the lower price, return them to the brokerage and keep the difference as profit. This may have been due to its low stock price, or perhaps due to familiarity with its brand. Yet its gradual move to over $6 per share, after crashing following the first round of meme mania?
Specifically, these retail traders are attempting to effect short squeezes in heavily short-sold stocks. This creates an event where short-sellers run for the exit, causing a rapidly rising stock to skyrocket contrary opinion higher as short-sellers buy to cover their position. Video game and accessories retailer GameStop is the perfect example of what can happen when the conditions are absolutely perfect for a short squeeze.
Value Deepens for Medtech Stocks
So-called « bot farms, » where people pay for fake accounts in the dozens, hundreds, or even thousands, plague the internet, and Rehl said it can be hard to tell if accounts are real or fake. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. Meme stocks often happened to be hard to borrow, with a high short-interest ratio. GameStop followed suit in 2021, raising nearly $1.7 billion via a secondary offering of 8.5 million additional shares at an average price of more than $200 per share.
Meme stocks rose when rates were low, stimulus money was flowing and Americans were spending most of their time at home while COVID ran wild. The signals that sent stocks flying during the first half of 2021 won’t be the same ones that precede the next viral stock surge. Here are 2 schools of thought on identifying the next parabolic meme stock. While some thought that the meme stock craze would be short-lived, the phenomenon remains in force months 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. Short selling is when somebody sells shares that they do not own, hoping to buy them back at a lower price.
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. The eye-popping gains have inspired legions of hopeful successors to the original meme stocks, and sifting through the noise of online stock manipulation has never been harder. Despite no shortage of headlines about the economic reopening, generous fiscal stimulus packages, and the Federal Reserve’s monetary policy, meme stocks have stolen the spotlight in the investing world this year. It also has the best stock symbol AI when AI integration and usage is a major tailwind. AI shares peaked at $183.90 in December 2020 before selling off to a low of $10.16 in December 2022.
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