Meme stocks appear to be making a bit of a comeback. The market had thought that it had seen the last of meme stocks when the pandemic ended. Clearly not.
The best thing about meme stocks is that it shows that the market is working. The worst thing about meme stocks is that it shows that the market is working.
Meme stocks are essentially shares that have aroused the animal spirits of the social-media crowd. When enough people throw enough money at a particular stock, it stands to reason that the share price could rise.
As increasingly more people buy the shares, the price could even shoot up exponentially. But they could fall just as quickly when sellers ditch their shares in droves. There is something else.
Generally, but not always, these shares could have poor fundamentals. So poor in fact that some investment houses might decide to short the shares. In other words, they might…
