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Meme Stocks Explained: To the Moon or Crash and Burn?
6 original charts that show returns, risk, trading volume, short-interest, and outlook for meme stocks versus FAANG stocks
The stock prices of GameStop Corp. (GME) and AMC Entertainment Holdings, Inc. (AMC) continue on their wild rides in 2021. This year AMC is up over 2,600 percent percent and GME is up over 1,500 percent. They are two of the so-called meme stocks along with, Bed Bath & Beyond, Blackberry, Sundial Growers, and others. Can the ascent of these meme stocks continue to the moon or will short-sellers like hedge funds prevail and send prices crashing back to earth? We’ve seen fights like this before, particularly during the dot-com era. I’ll explain what meme stocks are and examine the recent performance of some meme stocks compared with the well-known FAANG stocks. I’ll describe what short-selling is, what short-sellers are trying to do, and what challenges they face today, similar to what they faced during the dot-com era of the mid-to-late 1990s. I’ll delve in to the prospects of these meme stocks. And finally, I’ll provide a checklist of what you should think about before jumping on the meme stock bandwagon — or the crypto bandwagon for that matter.
