NEW YORK — Meme stocks are shaking Wall Street once again Monday. And, as is so usually the case, it all started online.
Ever since bands of smaller-pocketed and novice investors began taking stock prices of downtrodden companies to breathtaking heights three years ago, the potential for more flareups has been obvious. It was the first post for the Reddit account since April 2021, when it had posted what it called a “final update” on its"YOLO", or you-only-live-once, investment in GameStop. Euphoria erupted quickly, with users on Reddit exclaiming “I'M HERE FOR HISTORY!” and “If he's still in, I'm still in.”SHOULD THE STOCK BE RISING THAT FAST?
A short squeeze is a relatively rare event that can yield eye-popping profits for people riding the wave. When investors bet a stock's price will go down in the future, they “short” it by borrowing shares and selling them. Later, if the price does indeed fall, the short sellers can buy the stock, return the borrowed shares and pocket the difference.