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A FINANCIAL EXPLANATION
By Dr. David E. Marcinko MBA CMP®
SPONSOR: http://www.CertifiedMedicalPlanner.org
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DEFINITION: The meaning of meme stocks is sort of self-explanatory: hyped stocks that perform well. But from a fundamental perspective, they shouldn’t do well at all.
CITE: https://www.r2library.com/Resource/Title/0826102549
For example, Reddit forums and social media hype drive meme stocks. Speculators on Twitter and Reddit united together to trade their favorite companies in hopes of driving them “to the moon.”
It may not be fair to call them speculators. These hype beasts want to buy and hold stocks of companies that might not have a great long-term outlook.
Brokerages like Robinhood helped level the playing field with apps and ‘easier’ access. That’s giving retail traders more opportunity. Robinhood traders can buy with just a few clicks on their smartphones and use partial positions to buy chunks of stocks.
And it’s helped create meme stock madness.
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Filed under: "Ask-an-Advisor", CMP Program, Glossary Terms, Investing, Touring with Marcinko | Tagged: Certified Medical Planner™, CMP, David Marcinko MBA, meme, MEME stocks, what is meme stock? |
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MEME
Former President Trump announced he was creating a new media venture last Wednesday and since then, the share price of a company that’s taking it public has been on a ride reminiscent of GameStop and AMC in the early days of 2021.
Digital World Acquisition Corp., which is a SPAC (special purpose acquisition company), soared from $9.96/share before the announcement to $94.20—a jump of 846%. Even in the wild world of SPACs, that’s an unhinged rally, and it reflects heightened interest among retail traders looking to make a quick buck.
The implied value of the new company is now more than $8.2 billion. Since Trump appears to own more than 50% of the enterprise, according to SEC docs, it would make him the richest he’s ever been.
Quick reminder: A SPAC is a shell company that’s formed with the goal of acquiring other companies and taking them public. It’s been an increasingly popular way for companies to list their shares on the public market—WeWork just went public via SPAC last week.
What is Trump’s new company? It’s a social media platform called “Truth Social” and…that’s about all we know. No CEO was mentioned, and neither were any financial metrics. A press release said the company is planning a launch early next year.
Anonymous
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