Meme stocks are stocks in companies that have large communities of online and social media followers, as well as media hype. 

This can result in the stock price being artificially inflated by the market, making the shares appear to be worth more than they are.

The idea behind meme stocks is that they have become so popular that they have gone viral online, causing their value to rise.

However, just because something becomes popular does not mean it is worthwhile to invest in it, especially if the popularity is due to a fad or trend.

Here are some examples :

Long Island Iced Tea Corp (LTEA) – After Long Island Iced Tea announced that it would change its name to Long Blockchain Corp and focus on blockchain technology instead of iced tea, shares increased by 200 percent. 

The stock has since dropped back to pre-announcement levels, owing to concerns about the company’s debt load and lack of revenue growth.

KodakCoin (KODK) – Shares of Kodak increased by 60% after the company announced plans to launch its own cryptocurrency, KodakCoin. 

However, following concerns about the company’s debt and lack of revenue growth, the company’s share price has since dropped back to pre-announcement levels.

Gamestop – The infamous stock that shot to the moon (1000% increase) and then crashed landed when the craze passed.

As shown in the preceding examples, some investors lost their entire investment when their memes failed.

Overall, investing in meme stocks is not advised.

If you must trade meme stocks, do so with extreme caution, never be greedy, and never go all-in.

Use spare money that you don’t mind losing, because you risk losing it all if you enter at the wrong stage.