Thus, a meme stock is a shared investing idea imitated by other investors. The word "meme," from the ancient Greek word "mimema" - meaning imitation - is used to describe information that is imitated and often spread via pop culture references on social media. These short-term surges can often reverse course just as quickly, though, making meme stocks far more volatile than average stock market moves. Simply put, meme stocks skyrocket in price in a short period (often hours or days) because of a sudden surge in interest online or on social media and subsequent buying among small individual investors. This comes from renewed consumer interest, along with a rebounding share price or the raising of fresh cash through capital markets when the stock price rises. On the other hand, as individual investors point out, given enough support from the masses, a climbing stock price (regardless of current fundamentals) can eventually equate to a stronger business. More traditional investors decry the lack of business fundamentals and strong performance to justify sharp surges in stock price. What are meme stocks, and are they worth the investment? For the right person, investing in the right meme stock for the right reasons can make a lot of sense. However, simply writing off all meme stocks as too risky can be a mistake. But, as many traditional investors and analysts point out, these viral stocks can be very risky since they rely on high interest from small investors to sustain the stock prices' liftoff "to the moon." Meme stocks are created when a company's shares catch fire with individual investors on social media platforms such as Reddit and quickly skyrocket in price. Meme stocks have been all the rage among retail investors during the COVID-19 pandemic.
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