Some stocks are rising due to meme stocks. Here's why.
Sarah Tew/CNETGameStop's stock is still riding out the wave from Reddit's community, WallStreetBets, and, after market close on Saturday, is currently sitting at $325 per share. Reddit users are battling it out with Wall Street to keep GameStop's stock prices soaring while Wall Street expected a crash. Small investors are using Reddit communities to drive "meme stocks," causing short sales and short squeezes. And it's not just GameStop. Other companies, like AMC and Nokia, have also been affected by the coordinated surge.
No, this doesn't mean you should necessarily drop everything and fully invest in the stock of the moment. Some are calling the market manipulation a "Ponzi scheme," and the stock price will likely even out once the hullabaloo dies down.
In fact, broker TD Ameritrade restricted trading of the GameStop and AMC stocks on Wednesday and continues to post an advisory note to clients about market volatility. Trading app Robinhood followed suit on Thursday in response to the runaway growth -- the company got itself into trouble by restricting stock trades and will be closely reviewed by the SEC (they're now limiting buys on AMC and GameStop stocks). The White House has said it's monitoring the situation.
Watch this: What does GameStop's skyrocketing stock have to do with...
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Part of what's so unusual about the GameStop stock spike is the vocabulary that's been used to drive the trading action. Elon Musk, founder of Tesla and SpaceX, helped fuel the activity with a one-word tweet on Tuesday: "Gamestonk."
What's a stonk, and what does it have to do with trading? Here's a sampling of the lingo behind the enormous highs, and what the terms mean:
- Stonks: An intentional misspelling of stocks. Sometimes features Meme Man when used in a meme (see below).
- Diamond hands: When a trader is prepared to hold onto their stocks or securities for a long time.
- Rockets: When someone wants a stock price to skyrocket.
- Hold the line: Holding on to a stock, even if it goes down in value.
- "We like the stock": A meme used for a currently trending stock.
Stonks is often associated with Meme Man, pictured.
Know Your MemeIf you do decide to dive into the stock market -- and we're not advising you in either direction -- here are some top tips about investing, and some robo-advisors that can help you. In addition, here's more information about how Reddit and Elon Musk sparked the GameStop surge. Here's everything you need to know about stock splits and five investment accounts everyone should have. Plus, check out the funniest GameStop Reddit jokes and memes.
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January 30, 2021 at 11:12PM
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GameStop stock spike lingo: Here's what Reddit's WallStreetBets vocabulary means - CNET
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