In the age of social media and viral trends, the stock market has experienced a new kind of phenomenon — one where memes, online communities, and digital culture collide with real-world investing. These so-called meme stocks have turned everyday retail traders into internet icons, moving billions of dollars in market value with nothing more than viral posts, hashtags, and a shared sense of rebellion against Wall Street institutions. What began as internet humor quickly evolved into a movement that blurred the line between finance and entertainment.
For some investors, meme stocks represent empowerment — proof that small investors can challenge the dominance of hedge funds and institutional players. For others, they’re symbols of speculation and herd mentality, where hype and emotion overpower reason and research. But whether you see them as a revolution or a risky game, meme stocks have undeniably reshaped modern investing and forced traditional finance to take notice.
What Is a Meme Stock?
A meme stock describes the equity of a publicly-listed company that has surged in popularity not because of its business fundamentals, but due to intense online attention and communal sentiment. Typically, this phenomenon springs from activity on social platforms, where investor groups, message boards, or social-media threads rally around a particular ticker and apply collective research or hype to it.
These meme shares often become the subject of extensive discourse in forums such as r/wallstreetbets on Reddit, as well as posts on platforms like X (formerly Twitter), Facebook and sometimes via investor-driven YouTube videos and livestreams.
Key Takeaways
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Meme stocks are equities of companies around which dedicated online communities rally to craft narratives and drive momentum.
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GameStop Corp. (ticker GME) is widely recognized as the original meme stock surge.
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GameStop’s share price at one point soared by up to 100 × within a matter of months as its viral investor base orchestrated a short squeeze.
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The meme-stock movement has generated its own slang, phrases and cultural markers used broadly in online investor circles.
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These stocks carry elevated risk — especially due to their extreme volatility, speculative trading patterns and dependence on social-media-driven attention.
How Meme Stocks Work
In internet culture, a “meme” is an idea, image or piece of content that spreads rapidly across people’s minds — often humorous, ironic or culturally resonant. With the rise of social media, memes have become powerful vehicles for viral content. Likewise, in the stock-market context, the idea of a “meme stock” emerged when investment narratives circulated quickly among retail investors, generating a surge in attention and trading volume.
Discussion boards and chat rooms focused on investing have existed for decades — they helped fuel previous speculative waves, such as the dot-com boom in the late 1990s. Yet the modern meme-stock phenomenon really crystallised around 2020, especially on Reddit’s WallStreetBets forum. Users adopted a bold, playful tone, and began coordinating around certain heavily shorted equities. While some commentators argue these investor groups coordinate strategically, most appear to be loosely-connected individuals sharing ideas, memes and peer-driven hype. Collectively, their actions have triggered dramatic price moves — often disconnected from traditional fundamental or technical analysis.
GameStop: The First Meme Stock
The turning point came when the retail-investor figure known as Keith Gill (aka “Roaring Kitty”) posted a viral video laying out why GameStop’s stock — then trading at around US $5 per share — could rise to US $50 or more, targeting its status as one of the most heavily shorted equities in the market. Shortly thereafter, investor and former CEO of Chewy, Ryan Cohen, revealed a significant stake in GME and joined its board, which rapidly amplified the story. In January 2021 the short squeeze unfolded in full force: GME’s price surged toward US $500 as short-covering and panic buying fed the rally. Several hedge funds were caught off guard and incurred massive losses. In that moment, the meme-stock saga took on a David-versus-Goliath narrative — retail “apes” versus Wall Street elites.
Tip: Roaring Kitty is the social persona of Keith Gill, who posted under the Reddit alias u/deepF…Value.
GME Gets Squeezed Again
After the initial craze, GameStop’s shares drifted lower and by Spring 2024 were trading around US $10. But in mid-May that year, Keith Gill returned to social media with cryptic posts, including a widely-viewed image and movie-inspired memes. Although he did not issue formal investment advice, the posts triggered renewed purchasing momentum. GME shares jumped nearly 100 % on May 14 following a 74 % move the previous day, catching short-sellers off guard and producing estimated losses of over US $1.3 billion in just two days. The rally widened to other companies — for instance, AMC Entertainment Holdings, Inc. rallied around 120 % in early trading and used the surge to raise approximately US $250 million via a share sale. While analysts noted parallels to the original 2021 wave, they were divided as to whether this was a sustainable resurgence or a fleeting speculative flicker. The episode underlined how viral sentiment and social-media momentum can override standard market logic.
Fast Fact: The meme-stock era was aided by bored individuals during COVID-19 lockdowns plus zero-commission brokerage apps like Robinhood — at times the platform even experienced outages due to surging volumes and user anger, leading to lawsuits and regulatory fines.
Other Meme Stocks
Though GameStop was the trailblazer, it was far from the only meme stock. Retail traders on forums such as WallStreetBets soon targeted other companies with high short-interest or faded business models, including AMC, BlackBerry Limited (BB) and Bed Bath & Beyond Inc. (BBBY). These stocks drew mass participation and experienced rapid, multiple-fold price increases. The community even embraced the “lulz” factor of legacy firms being revived by retail mania. Some meme stocks fared poorly despite the hype — others flirted with rapid gains only to collapse later. Additional names include Koss Corp. (KOSS), Vinco Ventures Inc. (BBIG), Support.com, and ironically even Robinhood Markets Inc. (HOOD) itself.
A Meme-Stock Glossary
Meme-stock communities have developed their own language and slang, often found in chat threads and social-media posts:
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Apes 🦍: The self-described retail investors banded together in meme-stock trades.
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BTFD (“Buy the f***ing dip”): Encouragement to buy after a price drop.
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Diamond hands 💎🤲: Staying invested despite steep losses, confident of a rebound.
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FOMO: Fear Of Missing Out — the urge to jump in so you won’t miss the big move.
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Hold the line: Rallying cry to maintain your position amid volatility.
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Paper hands 🧻🤲: Derogatory term for investors who sell too early and lack conviction.
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Stonks: Deliberately misspelled “stocks” often paired with humorous visuals.
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Tendies 🔥🍗: Profits made on meme-stock plays (short for chicken tenders).
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To the moon 🚀🌙: The belief that a stock’s price will skyrocket.
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YOLO: “You only live once” — the justification for taking a risky bet.
Other Developments
The meme-stock trend has benefited day-traders, retail investors, and brokerage platforms — and companies themselves have recognised the hype. For example, AMC’s executives leveraged the elevated valuation in 2021 by executing follow-on share offerings, raising more than US $1.5 billion from eager retail buyers. GameStop followed suit around the same period with about US $1.6 billion raised via a secondary share issuance. Conversely, Bed Bath & Beyond announced plans in 2022 to sell 12 million shares amid meme-driven interest — yet its stock plunged thereafter.
Meme Stocks and Short Selling
A key feature of many meme stocks is their heavy short-interest. Short selling happens when someone borrows shares and sells them, betting the price will drop; if the stock instead rises, the short-seller must eventually buy the shares back (cover) at a higher price, incurring losses. Because many meme stocks have limited available shares to borrow, and because the retail base may drive the price up rapidly, a “short squeeze” can occur: short-sellers race to buy back, which further drives the price upward.
Important: Meme stocks are often hard to borrow and display high short-interest ratios.
Why Are They Called Meme Stocks?
The term “meme” in this context draws directly from the internet concept — an idea, behaviour or style that spreads exponentially among people. Meme stocks are so called because the investment narrative around them is spread rapidly through social-media posts, forums, memes and viral chatter — rather than being supported by underlying corporate growth or valuation metrics. Communities form around the ideas, build inside jokes, symbols and rallying cries to push the narrative forward.
Is There a Meme-Stock ETF?
Yes – for a while. In December 2021, Roundhill Investments launched an ETF under the ticker symbol MEME, which held an equal-weighted basket of approximately 25 stocks chosen based on social-media popularity and market sentiment (including short-interest). The fund assessed a “meme score” derived from mentions on specific platforms over 14-day periods and short interest data. However, Roundhill discontinued the MEME ETF in December 2023. Single-stock ETFs with leveraged long or short exposures also exist and may include meme-type stocks such as Tesla, Inc. or Nvidia Corporation.
Are Meme Stocks Real Investments?
Technically speaking, meme stocks are real shares listed on exchanges, tradeable and accessible like any other equity. However, critics argue that many meme stocks lack alignment with traditional investment principles — such as strong fundamentals, cash flows or growth prospects — and instead resemble speculative gambles driven largely by sentiment, peer enthusiasm, hype and social-media momentum.
When you evaluate a meme stock, keep in mind: you may be trading community narratives and short-squeeze potential rather than investing in intrinsic value.
The Bottom Line
The meme-stock phenomenon became a major theme for retail-investor trading in early 2021, with headline cases like GameStop and AMC. Their categorisation as “meme” stocks stems from the viral online culture around them, the retail-trader communities that supported them, and the detachment from conventional business fundamentals. While the potential for rapid gains is real, so too is the elevated risk, high volatility and unpredictable nature of sentiment-driven markets. For many investors, the appeal of meme stocks lies in the excitement — and the gamble — rather than in long-term value creation.
FAQ
1. What are meme stocks?
Meme stocks are shares of companies that gain sudden popularity online, often driven by viral social-media discussions rather than company fundamentals.
2. Why do meme stocks go viral?
They often go viral when online communities — like Reddit’s r/WallStreetBets — rally around certain stocks, creating hype and rapid buying momentum that drives prices up.
3. Are meme stocks good investments?
Meme stocks can offer short-term gains, but they’re extremely risky. Prices often move on emotion and hype, not on financial performance or long-term value.
4. What is an example of a meme stock?
GameStop (GME) and AMC Entertainment (AMC) are two of the most well-known meme stocks that surged dramatically during retail trading frenzies in 2021.
5. How do meme stocks differ from regular stocks?
Regular stocks usually move based on earnings, growth, and market data — meme stocks move mostly from online buzz, community sentiment, and viral trends.
6. Can you make money from meme stocks?
Yes, but it’s risky. Timing the market is difficult, and most retail investors lose money once the hype fades and prices drop.
7. What is a short squeeze in meme stocks?
A short squeeze happens when investors who bet against a stock are forced to buy back shares after prices rise sharply — which can push the price even higher.
8. Are meme stocks here to stay?
While the hype may fade, meme stocks have changed how retail investors interact online — blending culture, finance, and community investing for the long term.