What’s a meme stock?
A meme is defined as an idea, behavior, or style that spreads quickly from one person to another, often via social media. Meme stocks experience similar surges in viral activity. Users on social media platforms may encourage others to invest in a company’s stock for no other reason than to see the price increase, often with little or no regard for the company’s fundamentals (revenue, profits, etc.). The excitement around the company builds quickly, and when there’s an influx of buy orders for the stock, the stock price soars. However, many of these companies’ stock prices fall soon afterward, which can leave some investors wondering why they invested in the first place.