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May 17, 2024

Meme stock mania is back: Why everyone is talking about GameStop, AMC and more again

Over the past year, certain stocks have been dubbed "meme stocks" because of the social media hype, including stocks such as GameStop and AMC. These stocks are heavily promoted and discussed by online communities like Reddit's WallStreetBets, leading to significant price swings which often defy traditional financial analysis. GameStop returned to the spotlight in March 2021 when its shares surged, which also fueled increased interest in AMC, Blackberry, and several other stocks. GameStop, in particular, saw new life after its board announced it would transition to a digital sales model, sparking new enthusiasm among investors. The renewed interest in these "meme stocks" often attributed to several factors, including the influx of retail investors due to the ease of access provided by online trading platforms, the desire to oppose big Wall Street hedge funds that are short selling the stocks, and the use of social media platforms to coordinate buying activity to drive up share prices. However, it's important to remember that investment in these types of stocks can be very risky, as their prices can be extremely volatile. While some people have made substantial profits, others have experienced significant losses. It is always recommended for investors to do their own research and consider their risk tolerance before investing.