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- Stocks have gone parabolic since the beginning of public markets, but meme stocks existed during a very unique time.
- The company introduced a new AI platform that customers are flocking to.
- “They are shrinking, period, and they can’t save their way to prosperity,” he added.
- UPST shares are up over 430% in 2023, propelled by its 37.44% short interest.
As of May 28, a little over 7.8 million shares of the company were held short. That may not sound like much, but Dave & Buster’s only has 42.4 million shares in its float. If getting rich off meme stocks were easy, thousands of Redditors would be millionaires. Below is a comprehensive breakdown of Insider’s coverage of the meme stock movement and how investors can profit from it.
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All this seems like very bearish news, so its short interest rose to 27%. The higher the price of GME rose, the more that shorts would chase it to buy and cover their short positions. Additionally, forced margin calls would automatically trigger short covering surges of buying pressure. Meme stocks have no precise definition, but they’re not hard to spot. Common characteristics of these select few stocks include sudden rallies and volatile price swings on unusually high trading volume.
The company builds enterprise big data and AI software that helps organizations update their operations for a digital era. Palantir has concentrated exposure working for government entities, but it’s quickly working to expand further into the private sector. SoFi’s financial services — all unified together via a singular app — got its start in the student loan niche of the industry. But since becoming a public company, the fintech stock favorite has gotten aggressive, expanding its reach and has added a few million new customers in recent years.
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Retail investors are also likely to remain keen to pick up on the latest meme stock. Dominated by younger investors, meme stocks are still seen as a way to generate outsized returns in a short period, especially in the face of rising housing costs and inflation in general. But meme stocks also remain very volatile and risky, and retail investors are likely to be the ones to experience the most losses if it all comes crashing down. GameStop’s stock price then surged due to a massive short squeeze affecting some major hedge funds that were short the stock and forced to sell to cut losses. As mentioned above, the stock price went from less than $5 a share to $325 (by January 2021) in less than six months. The new movie „Dumb Money“ is about the GameStop craze in 2021 when amateur traders banded together on the social media site Reddit to give professional investors a run for their money.
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Rehl and subreddit moderators aren’t the only ones keeping a close eye on meme stock manipulation. The Justice Department and the San Franciso US attorney’s office are both investigating the events of this January to determine if the sudden surge in GameStop shares constitutes market manipulation. The Commodities Futures Trading Commission is conducting a similar investigation regarding the prices of silver futures. 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.
VanEck Social doesn’t own BBBY stock either, but does have positions in some larger firms like Apple (AAPL). But shares are expected to rally more than 200% in 12 months. Novavax is expected to make $4.66 a share in 2022, reversing a loss in 2021. Analysts seem to be trying to get ahead of the next meme stock rally. Bed Bath & Beyond is seen losing more than $730 million this fiscal year, analysts say, nearly double what it lost last fiscal year.
Meme stocks must have a high short interest to spark a short squeeze. Meme stocks should have social media buzz, a huge rising volume and a small float. Meme stocks became all the rage among retail investors during the COVID-19 pandemic. 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.“
GameStop, among the first meme stocks, is a prime example of how the retail investor community identified a highly shorted stock and used a short squeeze to work in their favor. Meme stocks lure investors with the promise of potentially big returns in little time. Bear in mind that meme stocks can be especially volatile, so plan accordingly and be prepared to continue investing more over time. If you’re not interested in building and managing your own portfolio of meme stocks but still want some exposure to the movement, there are some ETF solutions to help.
For example, if the benchmark S&P 500 rises 1%, we would expect to see Intercept up more than 1.5%. The same is true when the broader market moves down, as well. However, Blink certainly fits the definition of „meme stock“ if you get a closer look at its operating performance. The company produced (drum roll) only $2.23 million in sales during the first quarter (it’s a $1.62 billion company, for context).
Here are three top meme stocks I think are worthy of being kept on watchs list right now, even for investors who don’t necessarily want to step into the fray now. Short selling is when somebody sells shares that they do not own, hoping to buy them back at a lower price. That seller must borrow shares from somebody who is long the stock in order to sell them. As more and more shares are sold short in this way, there are fewer shares left available to borrow. Once a stock becomes hard to borrow, even the most motivated short seller may be unable to do so. Some meme stocks did not fare as well as others, even with the occasional short squeeze.
So if you sell the stock you borrowed for $10, and then its price rises to $50, you’re responsible for those shares, meaning you’re on the hook for that $40 you owe the broker. And if the stock price rises to $500, you’ll owe that difference. As with other highly volatile investments (such as the related cryptocurrencies movement), there are drawbacks to betting on meme stocks. Smartphone pioneer Blackberry was another meme stock in 2021. The Canada-based company, which has now pivoted to cybersecurity, saw its stock rise 115% early that year.
Top meme stocks now
Some business fundamentals and economic trends can go a long way toward balancing out what can be fleeting social media trends or hopes of a short-term short squeeze. While not an all-encompassing description, retail investors from Reddit and other social media chatrooms https://forexhero.info/ have been banding together and seeking out stocks with high levels of short interest. Since a large percentage of short-sellers are institutional investors or hedge funds, the rise of the retail investor has taken on the feel of a David vs. Goliath battle.
In order to avoid paying ruinous interest costs, the firm will probably have to keep selling more shares of AMC stock. That process, in turn, will weigh tremendously on the shares’ value going forward. Not only has Siga’s share price been rising, olymp trade broker reviews 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.
As of May 28, Blink had nearly 12.5 million shares held short and a float of 35.9 million shares. More importantly, Blink Charging has seen just shy of 3.5 million shares trade hands daily over the past three months. This suggests it would take more than three full days for short-sellers to exit their positions, should they choose to do so. However, it’s worth noting that every meme stock mentioned in this article has sometimes fallen over 90% from its highs. For this reason, they can be dangerous and are only worth holding if you get in at a good price and things are fundamentally improving. Despite its partnerships with well-known fast and casual restaurants, sentiment turned sour as the competition crawled out of the woodwork, diluting its market share.
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