Recent rallies in stocks popularised on social media have attracted increasing numbers of investors looking to these so-called “meme stocks” for quick returns. But while it might look like a fun game, there are real risks to investing in stocks and other financial products popularised on social media. And with recessions looming around the world, the danger is becoming even more acute.
The term meme stock was traditionally used to describe any share that receives a lot of attention on social media. One of the more notable recent examples of a meme stock, retailer GameStop, saw its stock soar by more than 10,600% in 2021 following discussions by individual investors on r/WallStreetBets – a popular subreddit on the Reddit social media platform. You’ve probably heard about other instances of assets popularised on social media of late, including cinema chain AMC and US retailer Bed Bath & Beyond.
