what is the next meme stock

Meme stocks often happened to be hard to borrow, with a high short-interest ratio. GameStop followed suit in 2021, raising nearly $1.7 billion via a secondary offering https://www.forex-world.net/ of 8.5 million additional shares at an average price of more than $200 per share. Stavros Tousios, MBA, is the founder and chief analyst at Markets Untold.

what is the next meme stock

Hedge funds are types of investments that pool money together from wealthy investors, and short selling is when you borrow shares from a broker and immediately sell them with the hope that the stock price will fall. If it does, you can repurchase the shares at the lower price, return them to the brokerage and keep the difference as profit. Many retailer investors became interested in Nokia because of the high number of its shares that were being sold short by institutional investors and hedge funds. 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.

Palantir has concentrated exposure working for government entities, but it’s quickly working to expand further into the private sector. Its (free cash flow was negative $1.8 billion in Q1 of 2023. Rivian needs to get itself to breakeven before its cash and short-term investment balance ($11.2 billion at the end of March 2023) dries up. Rivian is currently in the midst of “production hell,” a phrase coined by Tesla CEO Elon Musk when his company was trying to ramp up factory production to stem cash losses. Rivian has had hiccups getting its R1T electric truck out the door, but it’s making progress. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page.

best-performing meme stocks

In November 2020, it became public knowledge Cohen owned a 10% share in the company. By closing two days later, the value doubled; an 8x increase from the price at the time of Cohen’s and Gill’s previous posts. For those looking for the next big meme stock, there are certain stocks worth watching. 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. Even with meme stocks, the old adage, “Don’t put all your eggs in one basket,” still rings true.

what is the next meme stock

All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q reporting period. With millions of people stuck inside their homes, many of whom were now without work, they increasingly turned to investing (and more specifically, day trading) as a way to spend their free time and attempt to make money. Their first major target was the meme stock Gamestop, which skyrocketed more than 20x in value between 2020 and 2021, reaching a market cap of over $22 billion. To skip our detailed discussion of the history of meme stocks, click to go straight to the 5 Best Meme Stocks To Buy Now.

As a result, meme stocks can become overvalued relative to fundamental technical analysis. More traditional investors decry the lack of business fundamentals and strong performance to justify sharp surges in stock price. On the other hand, as individual investors point out, given enough support from the masses, a climbing stock price (regardless of current fundamentals) can eventually equate to a stronger business. This comes from renewed consumer interest, along with a rebounding share price or the raising of fresh cash through capital markets when the stock price rises. After the GameStop incident, some hedge funds suffered significant financial losses, while some retail investors made millions. Other meme stocks emerged after GameStop, some with varying degrees of success.

Motley Fool Investing Philosophy

Accordingly, for speculators looking for a top-tier meme stock on which to speculate, GameStop remains the king right now. I believe that the meme stock rallies we’ve seen play out in recent years aren’t likely to become commonplace. While an ETF such as MEME may be less risky than holding one singular stock, it’s still made up of high-risk investments that could just as easily plummet as skyrocket. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.

  1. Investing in a single stock usually carries more risk than investing the same amount of money in several different stocks.
  2. However, the stock fell steeply following the company’s announcement of the plan.
  3. Now in year three of the movement, new meme stocks are being created all the time as individual investors look for new ways to beat the stock market.
  4. If you’re thinking about buying and selling meme stocks, keep in mind that you will probably have to pay taxes on your profits.
  5. Memes gained increasing prevalence and relevance as the internet and social media grew.
  6. Hedge funds are types of investments that pool money together from wealthy investors, and short selling is when you borrow shares from a broker and immediately sell them with the hope that the stock price will fall.

Looking to turn some of that extra free time into money, many people turned to the stock market and social media for ideas. That makes now the perfect time for retail investors to hunt for a meme stocks list today and uncover the next meme stock to buy. In general, many of the meme stocks that saw sky-high stock prices in 2021 have come down quite a bit in 2022, sometimes to below where they started. Others, notably GameStop, remain elevated, although still far lower than the all-time highs. Memes began to take the form of humorous social media posts and viral videos with the advent of the internet.

Meme Stocks: What They Are and 5 Top Stocks for March 2024

While several massive companies like Apple, AMD, and Tesla are popular among retail investors, we have focused on smaller companies that retail investors are more likely to move the needle on. We have then ranked those popular meme stocks based on the number of hedge fund shareholders of each (ties are broken by the amount of money hedge funds have invested in each stock). Collectively, their independent actions have been shown to initiate short squeezes in heavily shorted names.

Where the ‘meme stock’ phenomenon stands, 2 and a half years after the GameStop craze

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. Those early meme pioneers, who https://www.investorynews.com/ often found their next meme stock on Reddit, caught the market completely by surprise and were wildly successful as a result. While GameStop was the first successful meme stock, it was not the only one.

What exactly are meme stocks?

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. Then, in January 2021, the short squeeze that The Roaring Kitty had suggested took place in earnest, with the price of GME shares exploding to nearly $500 amid a frenzy of short-covering and panic buying. 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. As with other fast-moving businesses, SoFi’s biggest hurdle now is how quickly it can focus on breakeven.

This is known as a short squeeze, and it accelerates a stock’s price increases as more and more short sellers are forced to bail out to cut their losses. In 2021, retail investors bet big on so-called “meme stocks,” with the goal of making money and upending power dynamics on Wall Street. The meme stock movement unofficially started in the summer of 2020, when most people were stuck at home during the first few months of the pandemic.

Meme stock investing relies on trying to time the market, which humans, even those professionally trained, are notoriously bad at. It also depends on knowing which stocks will pop and which won’t — which is essentially impossible. Single https://www.day-trading.info/ stock ETFs have also recently been introduced, which provide leveraged long or short positions on a single stock. Only a small number of these have been approved for trading so far, but do include some meme stocks like Tesla and NVIDIA.