Q&A With Gordon Pape: Meme Stocks — What the Heck Are They?

Gordon Pape | February 27th, 2023

In this Q&A, financial expert Gordon Pape demystifies meme stocks and explains how they became a popular investing option for young investors.

Q – In a recent article, there were reference to meme stocks. I don’t have a clue what that term means. What is a meme stock? – Jane R.

A – A meme stock is one that becomes popular with retail investors through social media. They become the topic of on-line discussion groups, who sometimes use their collective buying power to purchase shares in a company to drive up the price. The results can be astounding.

GameStop (GME-T) was the first big meme stock and it became a phenomenon, with its price rocketing from a few dollars to over US$500 a share at one point in 2021.

We still see periodic social media activity around GameStop and other meme stocks. GME traded as high as US$49.85 in 2022. As I write, it’s at US$21.80. I don’t recommend GME or any other meme stock but some young investors love playing them, as if they were video games. The US Securities and Exchange Commission has investigated but took no action, beyond issuing a report. -G.P.

If you want to know more, there’s a new Netflix documentary that looks at the GameStop saga in depth. It’s called Eat the Rich.

Do you have a money question you’d like to ask Gordon? Send it along and then check out our Q&A section regularly to see if it was chosen for a response. Send questions to [email protected] and write Zoomer Question on the subject line. Sorry, we cannot send personal answers.

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