Ironically, this action actually reduces the value of shares held by the speculators. Fueled by online forum discussion, especially on Reddit, Cohen attracted an army of believers in his strategy that sent the value of GameStop stock to as high as $81.25 after never breaking $14 fxpcm a share. Legendary investor Warren Buffett offered an observation on market behavior in his 2023 letter to Berkshire Hathaway shareholders. Good research can help investors find the best companies to invest in. Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018.
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- However, it would seem that the company’s immediate fortunes will depend on its EV business, which should be a catalyst in 2022.
- Atomera released first-quarter financial results on April 28.
- Top holdings in the portfolio include GameStop, AMC, and Palantir.
- Risking money in speculative investments can be exhilarating, but it is rarely the path to long-term wealth.
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. Another reason for the initial meme stock trades may have been that interest rates were near record lows. Cash offered almost nothing in the way of a return, so trading stocks may have felt like a way to earn something, https://www.broker-review.org/ despite its high risk. But in 2024, interest rates are much higher and savers earn decent yields on the cash they hold. Investors may be looking ahead to potential rate cuts by the Federal Reserve, but those are far from a guarantee. Ever since bands of smaller-pocketed and novice investors began taking stock prices of downtrodden companies to breathtaking heights three years ago, the potential for more flareups has been obvious.
Meme Stocks to Buy: PubMatic (PUBM)
The percent of the share float sold short was 24% for GameStop and 18% for AMC, according to the most recent data. But traders should keep in mind that even after their recent surge, GameStop shares are still down about 75 percent from their 2021 peak. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional. On Monday, investors pumped a net $15.8 million into GameStop, along with $37.5 million into AMC, according to data from Vanda Research. That compares with $87.5 million and $170 million, respectively, in 2021.
Meme Stocks: What They Are and 5 Top Stocks for May 2024
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. For most investors, the stock is likely too risky to take a chance on today. Unless you have an extremely high risk tolerance and are comfortable with significant volatility, this isn’t a stock you should consider adding to your portfolio. Not only has Siga’s share price been rising, but its trading volume is also significantly higher. The FDA approved Tpoxx to treat smallpox back in 2018, and so far the main reason for countries to buy it has been to have it on hand in the case of bioterrorism involving that disease. But the treatment is effective against monkeypox as well, and cases have been rising, accelerating demand for Tpoxx.
HOW MUCH REACTION HAS THERE BEEN, REALLY? IT’S ALL AN EXAGERRATION?
All this seems like very bearish news, so its short interest rose to 27%. In its first-quarter earnings report last week, AMC disclosed a net loss of $163.5 million as the theater chain works to recover from the large amounts of debt it took on to stay afloat during the pandemic. These firms have been generally unloved by most mainstream investors, as reflected in their previously desultory share prices. Here’s what meme stocks are and why they’re seeing renewed interest in 2024. It’s important to know the momentum can shift just as suddenly the other way.
I have to admit, if someone had told me there was a business case for XpresSpa Group in 2022, I would have been skeptical. And while I won’t be buying XSPA stock anytime soon, I’ll let you decide for yourself. The cannabis sector continues to draw speculative interest, although profitability still seems to be years away. And Sundial Growers remains one of the most volatile stocks in the sector.
Top meme stocks now
But meme stocks also remain very volatile and risky, and retail investors are likely to be the ones to experience the most losses when it all comes crashing down. Meme stocks also typically have an ownership base atypical for other stocks, with retail investors and insiders often owning a far higher percentage of shares than mainstream equities. For example, institutional investors like Vanguard and Fidelity own just 1% of Trump Media and 24% of GameStop, compared to 33% institutional ownership of Microsoft.
But chasing best-known favorites may not be the best way to score, analysts say. 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. In this and other forums that have popped up since, users work together to identify target stocks and then promote them, while also putting their own money to work. With the internet, chat rooms and discussion boards devoted to investing and promoting stocks also arose.
And remember that a meme stock is a short term trade, not a good investment for the long run. Video game retailer GameStop is recognized as the first meme stock. Add in a pandemic, a surge in new investors who grew up online, and the ease of stock trading on new apps such as Robinhood Markets (HOOD 3.58%), and all the right ingredients came together to create a viral meme stock movement. GameStop is the company that made the terms “meme stocks” and “short squeeze” household names. The initial surge in GME stock was caused by retail investors who identified a high level of short interest in the stock.
However, GameStop, AMC, and many other meme stocks weren’t able to sustain those levels for long and embarked on an extended retreat. Despite this week’s surge, they haven’t reclaimed their 2021 highs. Another common feature of meme stocks is high short interest, which means many other investors are betting the stock will fail. But people trade stocks for many reasons, not all of them supported by sound financial logic.