Understanding Meme Stocks

What is a key characteristic of meme stocks that differentiates them from traditional stocks?

• They are only traded by professional investors.

• They are driven by online virality and social media hype.

• They are always based on strong company fundamentals.

• They consistently provide stable returns over time.

What role did Reddit play in the rise of meme stocks?

• It provided a platform for large investors to short stocks.

• It was used to spread misinformation about stock prices.

• It served as a forum for retail investors to discuss and promote certain stocks.

• It was used to discourage people from investing in meme stocks.

What is a common phase in the cycle of meme stocks?

• The consolidation phase where stock prices stabilize.

• The dividend phase where stocks pay high dividends.

• The early adopter phase where investors believe the stock is undervalued.

• The liquidation phase where stocks are sold off by large investors.

What was a significant event in the GameStop case study?

• GameStop's stock price increased dramatically in a short period due to retail investor interest.

• GameStop's stock price remained stable throughout 2021.

• GameStop's stock price fell due to a lack of interest from online communities.

• GameStop's stock price surged due to strong company earnings.

What is a potential risk of investing in meme stocks?

• Inability to sell stocks once purchased.

• Lack of any potential for profit.

• Guaranteed loss of investment over time.

• High volatility leading to rapid loss of value.