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. The global AI frenzy has sent AI xm broker review shares up over 260% in 2023. 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.
Investing in meme stocks and ETFs
It’s vital to control your emotions should you take a position in a social media meme stock. Remember, they are best for trading as underlying fundamentals tend to be weak, which causes bears to short the stock, resulting in high short interest. The more irrational it is, the more likely short-sellers get involved and the more potential it has to short squeeze.
The Bankrate promise
Meme stocks are created when a company’s shares catch fire with individual investors on social media platforms such as Reddit and quickly skyrocket in price. But, as many traditional investors and analysts point out, these viral stocks can be very risky since they rely on high interest from small investors to sustain the stock prices’ liftoff “to the moon.” While not making any recommendations or indications about GME or any other stocks, these posts nevertheless reignited frenzied interest in meme stocks, causing a massive surge in trading volume and price. GameStop shares skyrocketed nearly 100% on Tuesday, May 14, 2024, following a 74% increase the previous day.
Top Meme Stocks of 2021: GameStop (GME)
While GameStop was the first successful meme stock, it was not the only one. WallStreetBets users quickly identified other downtrodden stocks with heavy short interest to boost. These included AMC Entertainment Holdings Inc. (AMC), the movie theater chain that saw flagging profits amid the COVID-19 pandemic, and Blackberry Limited (BB), the outmoded smartphone maker. 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.
WHAT ARE THE RISKS OF JOINING IN?
- While not making any recommendations or indications about GME or any other stocks, these posts nevertheless reignited frenzied interest in meme stocks, causing a massive surge in trading volume and price.
- Between AMC’s move into the non-fungible token (NFT) space and its willingness to accept some forms of cryptocurrency, the retail crowd believes there’s an emerging growth story for AMC stock.
- Carvana shares have already been in a short squeeze as shares rose as high as $57.19 and have rallied over 1,000% in 2023.
He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. “I believe the retail crowd is fully invested in this theme, and Wall Street has jumped on the coattails,” Burry said. “We’re running out of new money available to jump on the bandwagon.”
The rally in the stock market in 2023 may set the stage for another meme stock rally. While everyone is searching for how to find the next meme stock, we have a list of six that could be the ones. GameStop was unique because it had a 140% short interest, which is only possible through extensive naked shorting. That was the fuse triggering the short squeeze, which then took on a life of its own as it moved higher. Even GameStop can’t be the next GameStop stock with just a 16.95% short interest repeating what happened at the dawn of the meme stock bubble.
Missed BBBY? 10 ‘Meme Stocks’ Are Next Gold Mines, Analysts Say
The Los Gatos, California-based Atomera (ATOM) is a semiconductor materials and technology licensing company. The company has created Mears Silicon Technology (MST), a film that management claims could lead to higher performance. The company’s history goes back 2001 when it was known as Mears Technologies. It’s also a company concerned with limiting its environmental impact.
Revenue increased by 545% YOY to $400,000 versus $62,000 same quarter prior year. Basic and diluted loss share was 16 cents, versus a loss per share of 22 cents same quarter prior year. Cash and equivalents as of March 31 https://www.broker-review.org/ stood at $36.7 million. These stocks will likely not be appropriate for all portfolios. Investors should exercise extreme caution with such volatile shares, and those with a low risk tolerance should possibly stay away.
And, for the moment at least, people are willing to pay much higher prices for shares of GameStop. 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). Our first meme stock, Arcimoto, is a pre-revenue electric vehicle (EV) company, focusing on three-wheeled electric EVs that are marketed as affordable.
The only income received has been engineering services fees, though that could change with an agreement it forged earlier this year. But in the long run, the fundamentals of a company matters a great deal. And following the short-squeeze rallies, prices may easily decline as fast as they rallied.
The company has not profited in its operating history since its launch in 2009. It connects borrowers with lenders, including more than 60 banks and credit unions, to find the right match. The company claims that deriving a credit score is more accurate, reduces lenders’ default risk, and provides borrowers with faster and more personalized loans. UPST reached a high of $401.49 in October 2021 and fell to a low of $11.93 in May 2023.
Carvana shares have already been in a short squeeze as shares rose as high as $57.19 and have rallied over 1,000% in 2023. The short squeeze caused short interest to fall back to 21%, but anything above 20% is still considered a high short interest. The challenge is guessing how long this trend will last, as investors are effectively betting on how much of a problem monkeypox will be for the world. If it becomes another COVID, the healthcare stock could end up following in the footsteps of Moderna. However, if monkeypox proves more controllable and less dangerous, shares of Siga could end up falling soon. A high short interest can potentially lead to a short squeeze down the road, especially if the business does well and proves the naysayers wrong.
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. 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.
GameStop has been one of the biggest winners of the frenzy this week, along with AMC Entertainment (AMC). Those and other meme stocks have shot higher following the online return Sunday of one of the prominent drivers of the earlier meme craze. 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). 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. Without their cult followings, meme stocks are not necessarily valuable assets.
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