In this article, you will learn what is the meaning of a meme stock. A meme refers to an idea that spreads rapidly among people. With the advent of the internet, memes began to take the form of humorous social media posts and viral videos. Meme stocks are so-named because ideas about them, too, spread rapidly online on social media and web forums.
What Is the Meaning of a Meme Stock?
A meme stock refers to the shares of a company that have gained viral popularity due to heightened social sentiment. This social sentiment is usually heightened due to online and social media platforms. These online communities can dedicate heavy research and resources and around a particular stock meme stocks often have heavier discussion and analysis in discussion threads on websites like Reddit and posts to followers on platforms like Twitter and Facebook.
Though some believe meme stock communities coordinate efforts to influence the prices of those shares, meme stock shareholders are often an unorganized set of independent individuals, each with their own investment views and preferences. heavily shorted names. As a result, meme stocks can become apparently overvalued relative to fundamental technical analysis.
What are Meme Stock Glossaries?
Meme stock communities have developed a specific lingo used in their posts online. Some of these terms include (along with emojis used to denote them online):
- Apes: Members of the meme stock community. Some have attributed this to a meme related to the movie Rise of the Planet of the Apes, but others have suggested that the label comes from the banding together of “dumb apes” to take on the Wall Street elite.
- BTFD: An acronym for "buy the f***ing dip." Buying the dips means going long on a stock after its price has declined in the near term and is meant to be repeated after each such drawdown.
- Diamond hands: This has come to mean holding onto a stock despite (even heavy) losses, confident that the price will soon increase.
- FOMO or "fear of missing out": As in, if you don't catch the meme stock wave, you'll regret it.
- Hold the line: a battle cry to encourage others to stand firm with diamond hands in the face of volatility.
- Paper hands: This is a derogatory slur leveled against those who fail to maintain diamond hands. These are perceived as weak individuals without conviction who sell their shares too quickly.
- Stonks: An ironic misspelling of the word “stocks.” This meme predates WallStreetBets and often depicts a cruelly designed bald man in a suit staring blankly at an arrow pointing upward in price.
- Tendies: Short for chicken tenders, "tendies" refer to profits made in meme stocks. There are several claims for why this fast-food item is used for collecting profits.
- To the moon: The idea that a stock will rise exceptionally high, as if to the moon.
- YOLO or "you only live once".
Bottom Line
So-called meme stocks became a hot investment theme for day traders and retail investors early in 2021. resulting in short squeezes on hot stocks at the time such as GameStop Corp. This article is about what is the meaning of a meme stock.
