New meme stocks in 2022

In this series of articles, we will explore the topic of investing in meme stocks. This new area of securities trading has been stirring the imagination of individual investors for the past few years. According to statistics, fabulous fortunes have been made and lost in this niche. We will tell you about the history of the term "meme stocks", the pioneers in this sphere, financial analyst communities in social networks and their attempts to influence the global financial system.

In these articles, you will learn about the main features of modern meme stocks and read the fascinating story of how private investor groups have influenced the stock prices of GameStop, which has become a classic of the genre. We'll also talk about the pricing mechanism of meme stocks and the four phases of the cyclical behavior of these securities' prices.

You will also be able to look at our list of the top six promising meme stocks in 2022. You'll learn about the risks associated with using this financial instrument and the best online brokers to trade meme stocks directly. This overview will help you get answers to the most common questions.

What are meme stocks?

According to the definition from Investopedia, meme stocks are rapidly growing, hyped and promoted securities in the investment environment. Quotes on meme stocks grow very rapidly, sometimes tenfold or even hundredfold. For example, well-known securities of the company GameStop, the price of which did not exceed a couple of dollars per unit, has grown rapidly to resistance level of 400 USD (and without any visible fundamental factors).

Basically, the quotations of securities are driven by investors' expectations, which are based on future dividend yields and a significant increase in the exchange value. This can happen as a result of a change in the trend of the commodity cycle, a positive decision in a major lawsuit, the introduction of new technology, an innovative patent for a manufactured product, a change in government policy, and other significant factors. In the case of meme stocks, the rapid growth of quotations occurs for other reasons. Let's try to get to the bottom of this issue.

Companies perceived as having memes have not been very successful lately. The reason for this phenomenon lies in the behavior of individual investor groups. Relatively recently, a community of investors has formed on the Reddit platform wallstreetbets, where private investors share their experiences and, as the practice has shown, even sometimes conduct a kind of concerted intervention to inflate the quotations of their favorite securities. Since this all takes place in the Reddit environment, consequently, recent stock market news is discussed in the form of "memes" or funny pictures.

The members of the community began acting in late 2020. Since then, there have been periodic attacks on the stock market, or to be more precise, on the stocks they liked, now and then with greater or lesser success. As a result, such a concept as meme stocks emerged. Essentially, thousands, perhaps hundreds of thousands of individual investors are trying to coherently invest in their favorite securities to achieve a certain financial result.

In the following article, we will talk about the main signs of meme-stocks and a few examples of such companies.

___________

Also, if you want to use all available trading tools to increase your profits as soon as possible - follow this link below, or contact us via live chat. Our experts will help you to choose the best strategy for success.

Follow our updates for useful information in our series of articles.