Next Meme Stock: How to Find It and Should You Invest in It?

what is the next meme stock

Because a surge in buying activity can send a stock price soaring, there are some benefits to owning meme stocks (and potential meme stocks before they rocket higher). 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 limefx 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.

The information provided on this page is for educational purposes only and is not intended as investment advice. Opinions are our own, but compensation and in-depth research may determine where and how companies appear. “I believe the retail crowd is fully invested in this theme, and Wall Street has jumped on the coattails,” Burry said. “We’re running out of new money available to jump on the bandwagon.” Discover top dividend stocks defying myths with both secure dividends & double-digit growth. While Tupperware Brands currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better buys.

To have a short interest over 100% means there are illegal naked shorts. The float was also relatively small, at just over 56 million shares. Many astute retail traders figured if GME shares were to rally, it could cause a crazy short squeeze as the overcrowded short side would be forced to cover to avoid taking large losses. The answer is tough because the environment that made meme stocks viable no longer exists.

Featured Articles and Offers

Retail investors are always searching for stocks to send “to the moon.” Below are some of the hottest names that social media users are buzzing about during the week of November 8. Those long-suffering stocks shocked the world by spiking as much as 1,700% and 2,800%, respectively, and ushered in a new era of investing in what are now known as meme stocks. Meme stocks rose when rates were low, stimulus money was flowing and Americans were spending most of their time at home while COVID ran wild. The signals that sent stocks flying during the first half of 2021 won’t be the same ones that precede the next viral stock surge. Here are 2 schools of thought on identifying the next parabolic meme stock.

  1. To see all exchange delays and terms of use please see Barchart’s disclaimer.
  2. It’s vital to control your emotions should you take a position in a social media meme stock.
  3. Before closing its stores and selling its brand to Overstock, Bed Bath & Beyond was briefly a meme stock in 2022.
  4. Whether as a result of stock purchases or options bets, meme stocks have rallied impressively  on heavy volumes over the past year.

Investing in a single stock usually carries more risk than investing the same amount of money in several different stocks. Diversification across multiple investments helps buoy your portfolio in case one investment sinks. One reason retail investors are bound to like Intercept is its volatility. Intercept’s beta is north of 1.5, which means that, on average, it moves more than 50% more than the broader market. For example, if the benchmark S&P 500 rises 1%, we would expect to see Intercept up more than 1.5%. In 2022, Bed Bath & Beyond announced intentions to sell 12 million shares in a secondary offering as meme stock promoters pumped the value of its stock.

That was the fuse triggering the short squeeze, which then took on a life of its own as it moved higher. Even GameStop can’t be the next GameStop stock with just a 16.95% short interest repeating what happened at the dawn of the meme stock bubble. The next GameStop stock will have to have more than a 100% short interest. When deciding whether to buy into Reddit’s IPO, users aren’t just weighing the normal investment considerations, like whether Reddit can eventually turn a profit. They’re also wondering if Reddit could be the next meme stock, which could prove lucrative or disastrous. The other catalyst, as you might expect, is the right recipe for a short squeeze.

What Are Meme Stocks, and Are They Real Investments?

Richard Branson’s space tourism company, which started commercial space flight last year, also got swept up in meme stock craze of 2021. Virgin Galactic’s reached its all-time high closing price in February 2021 at $57. Stock manipulation on Reddit surged in May, Rehl said, adding that it took time for spammers and bots to learn the intricacies of investing subreddits’ rules and find loopholes. Reddit’s WallStreetBets page bans users that post “false or misleading information” and promoters of “any other worthless securities that are susceptible to scams or pump & dump schemes.” Even if this isn’t necessarily a deliberate fraudulent scheme, there are big drawbacks to jumping on the meme stock bandwagon.

The entire EV space (cars and ancillary products/services) is dependent on innovation. With acquisitions as its only weapon, Blink Charging will likely struggle coinjar reviews over the long run. Roaring Kitty’s real name is Keith Gill who was also on Reddit as u/deepF…Value and active on the subreddit r/wallstreetbets.

what is the next meme stock

That said, it’s clear that certain stocks have gained a cult-like following on social media channels. The trading volume of these stocks has been huge, largely due to retail investors who are looking for quick wins. Whether as a result of stock purchases or options bets, meme stocks have rallied impressively  on heavy volumes over the past year.

The sorts of short squeezes and parabolic moves that have proliferated really defied the rules of theoretical finance. Seeing some of these rallies play out, by the shares of  companies with dubious fundamentals, has been remarkable. But lesser-known investing subreddits can be plagued by manipulators like spammers and bots. The former are “bagholders” who made an ill-timed purchase and repeatedly post about a stock to boost its price so they can sell it higher, Rehl said. The eye-popping gains have inspired legions of hopeful successors to the original meme stocks, and sifting through the noise of online stock manipulation has never been harder. “The big risk with the meme stock investing is that it’s all based on the whims of the crowd,” he adds.

Pros of meme stocks

Comparatively, operating expenses, including compensation, more than doubled, leading to a $7.39 million operating loss. For most investors, the stock is likely too risky to take a chance on today. Unless you have an extremely high risk tolerance and are comfortable with significant volatility, this isn’t a stock you should consider adding to your portfolio. One stock that has been showing signs that it could be the next big meme stock is SIGA Technologies (SIGA -1.22%).

How to find the next meme stock

Meme stocks also see communities built around them that promote the hype and elaborate on the original meme, inventing specific terms and symbols to accompany the stock. Indeed, as these became recognized meme stocks, members of r/wallstreetbets and similar outlets began to acknowledge the humor (for the “lulz”) of seeing such legacy companies emerge from the ashes in the stock market. The main victims of the squeeze ended up being a handful of aafx trading broker hedge funds, some of which were forced to shut down due to heavy losses. As a result, the meme stock concept adopted a David vs. Goliath or Robin Hood connotation of taking from the rich Wall Street elite and rewarding the small retail investor. Tesla rival Rivian, an Irvine, California-based EV manufacturer, developed a cult following among the meme stock community. Its stock reached an all-time high closing price of $172 in November 2021.

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. But the treatment is effective against monkeypox as well, and cases have been rising, accelerating demand for Tpoxx. Retail investors have been buying up the stock, hoping to cash in on stronger sales numbers. This company’s status as a 5G provider does give investors reason to be upbeat about its growth outlook. However, it was Nokia’s following on forums such as Reddit’s WallStreetBets which really galvanized many investors to pile into this name. Stavros Tousios, MBA, is the founder and chief analyst at Markets Untold.

Thus, it would take well over five days for short-sellers to completely exit their positions. The companies Reddit retail traders are focusing on have come to be known as meme stocks. That’s because they’re valued for their social media popularity, not their (often poor) operating performance. 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. One of the features of meme stocks, especially early on, has been that they tend to be heavily shorted names. This means that there is a lot of short interest in the stock, or that a large proportion of the company’s outstanding shares have been sold short.

If it becomes another COVID, the healthcare stock could end up following in the footsteps of Moderna. However, if monkeypox proves more controllable and less dangerous, shares of Siga could end up falling soon. Not only has Siga’s share price been rising, but its trading volume is also significantly higher.

Leave a Reply

Your email address will not be published. Required fields are marked *