US EditionWhat makes a meme stock? Online enthusiasm for a beaten down company with doubtful prospects
UNITED STATES, JUL 30 – Online communities fuel rallies in beaten down stocks with poor growth, causing volatile price surges that often lead to losses for late investors, analysts say.
- The stock was priced around $11 prior to the surge driven by meme stock enthusiasm in 2021, which saw its value soar past $300 before declining to approximately $3 per share.
- Big interest from short sellers betting against the stock and online investor rallies led by figures like Keith Gill caused sudden price surges despite weak fundamentals.
- Meme stocks like GameStop gain attention through online forums such as Reddit and YouTube, where hype drives buying of highly shorted shares unrelated to company fundamentals.
- Hedge fund Eric Jackson touted an online real estate stock that surged from below $1 to $3.21 in July 2025, though buyers at peak prices ultimately suffered losses.
- This pattern suggests meme stocks rely on online enthusiasm and short squeezes, but carry risks as prices often fall back amid expectations of poor growth and continuing short seller pressure.
32 Articles
32 Articles
Associated Press News
What makes a meme stock? Online enthusiasm for a beaten down company with doubtful prospects
Investors sometimes buy shares in companies with bleak financial prospects, known as "meme stocks." These stocks often gain popularity in online forums and rise without any fundamental reason.
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