If you use social media, you might have come across a meme. To define, a meme is an idea, behavior, or style that spreads amongst a mass audience through online sharing. Memes have gained immense popularity in the recent past and have become a part of our everyday lives. Their growing popularity led people to even name an investing theme after them, known as Meme Stocks. But what are meme stocks, and how do they work? Read on to know.


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 due to activity online, particularly on social media platforms. Meme stocks often have heavier discourse and analysis in discussion threads on websites like Reddit and posts to followers on platforms like Twitter and Facebook.

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. 

Meme stocks, however, didn’t truly emerge until the year 2020 via the Reddit forum r/wallstreetbets. Unlike its predecessors and other investing message boards, WallStreetBets became known for its unconventional and often irreverent tone. In this and other forums that have popped up since, users work together to identify target stocks and then promote them, while also putting their own money to work

Phases of meme stocks

On the basis of investors’ preferences and how they invest, the meme stock cycle comprises 4 phases.


Some well-known examples of memestocks include:

  1. GameStop (GME): GameStop became the epitome of a memestock in early 2021. It saw an unprecedented surge in its stock price driven by retail investors organized through Reddit's r/WallStreetBets community. This frenzy resulted in a massive short squeeze and garnered significant media attention.
  2. AMC Entertainment (AMC): AMC Entertainment, a movie theater chain, experienced a similar surge in its stock price in early 2021. Retail investors on online forums, including r/WallStreetBets, rallied behind AMC and drove up its price to challenge short sellers.
  3. BlackBerry (BB): BlackBerry, a telecommunications company, also became a memestock in 2021. It gained attention from retail investors on online platforms, resulting in a notable increase in its stock price.
  4. Nokia (NOK): Nokia, a multinational telecommunications company, experienced a memestock rally in early 2021. Online communities discussed its potential and pushed the stock price higher.
  5. Bed Bath & Beyond (BBBY): Bed Bath & Beyond, a retail chain specializing in home goods, witnessed a surge in its stock price during the memestock craze. Retail investors, inspired by online communities, drove the price up.

Are Meme Stocks Real Investments?

Meme stocks are actual stocks listed on exchanges and available for trade. In that sense they are real. However, critics argue that their price performance and appeal have little to do with their fundamentals and much to do with their entertainment value as speculative playthings, much like casino games.

In summary,

Memestocks are stocks that gain momentum and attention due to their association with internet memes and online communities. They often experience dramatic price movements driven by online hype and speculation by retail investors through online coordination. While memestocks can generate substantial returns for some investors, they also come with significant risks and should be approached with caution.