What is a meme stock?

 

A meme stock is any stock that’s seen excessive trading volume from retail investors who’ve targeted it on social media. In other words, this stock has “gone viral” on social media and has seen its price skyrocket as a result.

 

By this definition, Dogecoin, the cryptocurrency that was launched as a parody is a meme stock. However, some meme stocks have an important differentiator: they’re live for a short squeeze. A short squeeze is when a short-seller is squeezed out of their position by excessive price action. A group of ordinary investors on social media can target a company with tremendous short interest and push it “to the moon” by forcing these short- sellers to close their positions.

 

 

These retail investors are tired of the Wall Street Investors taking advantage of the market. So they aim to squeeze the “Wall Street Junkies” out of their positions. It seems personal.

 

I think that meme stocks are not something to invest in. People should be more weary when investing. Instead of simply going along with the hype. You need to educate yourself on the topic first and most importantly understand what you’re investing your money in. You can’t afford to take someone else’s word for it, as it’s YOUR hard earned money at risk here.

 

Meme stocks are going to be around for quite some time, so you need to ask yourself “Is there any value to the company behind the stock?” and “Is the stock adding any value to my own life?” These are aspects that you need to establish before investing your money.

 

If you are new to the market do not invest in meme stocks and most of all do not feel any fomo because you see others making a lot of money. That is simply luck. The market is not about luck, but about calculated risk and reward.

 

If you just put your money into a random stock/cryptocurrency that you do not understand, it’s the same as gambling.

 

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