What makes them so special
As a 20-something year old who doesn’t have a clue about stocks, this recent case with GameStop is getting more interesting by the hour. I mean who would of thought Reddit as the central character in this ongoing saga? #RedditForTheWin
Ok. First, what the hell is a “meme stock?”
Definition
Any publicly traded company stock that keeps going up and disregards the fundamentals such as revenue and profits when valuing the underlying company. A meme commonly referenced by the stock market community is that “stonks always go up”. Hence, any stock that goes up in value beyond most people’s imagination is labeled as a meme stock.
Characteristics
-Typically overpriced
-Experiences spikes of rapid growth in short spaces of time
-Popular amongst millennials
-Prone to high volatility with valuations based around potential rather than financials
When did it become so popular?
These stonks really soared during the beginning of the pandemic. At that time, we were all inside our homes doing stupid stuff cause
How did GameStop get involved?
Short Answer:
Because like other memes, it’s purely for entertainment and attention-grabbing purposes.
Long Answer:
True fully, there’s really a lot more towards this trend that’s still raving. I’ll be on the lookout for more details and the next big stonk after both GameStop and AMC.
