What Are Meme Stocks? How They Move and What the Chart Shows

What are meme stocks? A meme stock is a share whose popularity and price are driven by social media attention and crowd buying, mostly by individual investors, more than by the company's actual business. That's why the price can run far past anything earnings or revenue support, and why it can fall just as fast. GameStop in January 2021 is the case everyone cites.

I trade momentum, so meme names land on my scanner like any other stock in play. Huge relative volume, a vertical chart, a ticker everyone is posting. On the chart they look like momentum. The buying behind them is different, and that difference decides how most of these trades end. (The SEC's findings on GameStop also don't match the usual squeeze story.)

Quick Answer

Every price here is labelled as traded at the time or split-adjusted, since GameStop and AMC have both changed their share counts since 2021. The diagram is schematic. There's no list of meme stocks to buy on this page.

What Are Meme Stocks?

The name is literal. "Meme" as in the viral image that gets copied and reposted until everyone has seen it. A meme stock spreads the same way, through posts, jokes and screenshots of other people's gains, and the buying follows the attention.

FINRA's investor guide to following the crowd on social media gives the meme stock meaning in one sentence. They're shares of companies that "become extremely popular and heavily traded based on social media hype and online community enthusiasm rather than traditional measures of value, such as a company's performance."

That gap between price and business is what matters if you're holding. When attention sets the price, it can sit far above what earnings or revenue justify, held up only by the next buyer. When buyers stop showing up, there's no valuation nearby to catch the fall. FINRA again: "Their prices can fall as quickly as they rise."

Who buys meme stocks, and where?

Mostly individual investors, the SEC's term for retail traders. FINRA has numbers. Among investors under 35 surveyed by the FINRA Foundation, 29percent report buying meme stocks or other viral investments. That's more than one in four, a mainstream habit rather than a fringe one.

The 2021 hub was Reddit's r/wallstreetbets, which the SEC names alongside YouTube channels. The same chatter now runs on X, TikTok and Discord too.

What makes a stock a meme stock?

There's no official definition and nobody keeps a list. The closest thing to a checklist is what SEC staff saw in GameStop, which they said had "a confluence of all of these factors: (1) large price moves, (2) large volume changes, (3) large short interest, (4) frequent Reddit mentions, and (5) significant coverage in the mainstream media."

The 2021 names were often struggling, beaten-down companies with brands people knew. The staff report calls many of them "consumer-focused companies that were familiar names to the public." Nostalgia is part of the pull. The edges are blurry, though. Big profitable companies with loud online fan bases get called meme stocks too, so the label says more about who's buying than about the business.

The slang

Every thread runs on the same vocabulary. The table translates it, with the chart version of each term.

Most of it is jokes. "Diamond hands" is the one that costs people real money, because holding no matter what is a plan with no exit.

How Do Meme Stocks Work?

A meme run is a feedback loop. Posts about a stock get people buying. The buying lifts the price on heavy volume. The rising price and the screenshots of gains turn into more posts, which pull in more buyers, and then the media picks it up and the audience grows again. It lasts as long as new buyers arrive faster than earlier ones sell.

Why do meme stocks go up?

Because more people want in than want out, mostly for reasons that have little to do with the business.

• Quick gains. A stock up 50% this week looks like it could do it again.
• A cause. In 2021 plenty of buyers wanted to hit the short sellers betting against GameStop.
• A squeeze. The payday everyone has read about.
• Fun. A small amount, just to be part of the show.
• Nostalgia. The brand they grew up with, getting one more moment.

Then there's FOMO. Watching strangers post huge gains pulls people in late, when the move is most stretched. FINRA warns that social sentiment information, especially real-time discussion platforms and sentiment-driven buy/sell indicators, "can sometimes lead to emotionally driven or impulsive investment decisions that you might later regret."

Where the short squeeze fits

Short selling is a bet on a fall. You borrow shares, sell them, and hope to buy them back cheaper. The guide on how shorting works and why the loss has no ceiling has the details.

If a lot of a stock is sold short and the price keeps climbing, short sellers get pushed to buy back, and that buying lifts the price further. That's a short squeeze. GameStop's short interest reached 122.97% of float in January 2021, per the SEC (above 100% happens when lent shares get lent again). The short squeeze explainer covers the full loop.

What most explainers skip is the regulator's own finding. In the SEC staff report on equity and options market conditions in early 2021, buying from traders with large short positions "was a small fraction of overall buy volume," and staff concluded that "it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock." They also "did not find evidence of a gamma squeeze in GME during January 2021." Options volume from individual customers did surge, but mostly in puts, and market makers were buying calls rather than writing them.

Covering added fuel at moments. The crowd carried the run. The squeeze guide's section on short squeezes versus gamma squeezes explains why the two look identical on a chart.

Why 2020 and 2021?

The usual explanation is a stack of conditions. Lockdowns left people at home with time on their hands, and stimulus checks and savings gave some of them cash. Trading also got close to free. App-based brokers made zero commissions popular, and by the fall of 2019 the big brokers had followed, the SEC report notes. Put a free trading app in front of a lot of bored people with a forum full of rocket emojis and you get January 2021.

It didn't start that month. GameStop was already a Reddit topic in 2019, squeeze talk included, according to the SEC, and the attention grew through 2020. The term "meme stock" went mainstream in January 2021, along with the price.

GameStop and AMC, With Every Price Labelled

One warning before the numbers. GameStop did a four-for-one stock split in July 2022, so every 2021 GameStop price is four times what a split-adjusted chart shows today. AMC went the other way, with a 1-for-10 reverse split effective August 24, 2023, so its 2021 prices show ten times higher on today's chart. Plenty of articles mix the two and quote numbers that never traded. The reverse stock split guide shows what that adjustment does to a chart.

GameStop, January 2021

The SEC's press release on the staff report calls GameStop "the most famous of the 'meme stocks.'" From the report itself, prices as traded at the time: on January 13, two days after a board announcement, GameStop closed at $31.40, up from $19.95, on about 144 million shares, roughly 20 times the 7 million of the day before. By January 27 it closed at $347.51, "a more than 1,600% increase from its closing price on January 11." On January 28 it hit an intraday high of $483.00. On a split-adjusted chart, that high is $120.75.

It didn't go up in a straight line. GameStop triggered 40 Limit Up-Limit Down volatility pauses in January 2021, against 1 in all of 2020, with 19 on January 28 alone.

The person most tied to the run is Keith Gill, who posted as Roaring Kitty. He drew a crowd of traders who cheered each other on and piled into GameStop shares and call options between 2020 and 2021, as NBC News recounted when he resurfaced in May 2024.

On January 28, several retail brokers restricted buying in GameStop and other meme stocks, reacting to margin calls and capital charges from the clearinghouse as volatility spiked, the SEC found. One broker's restricted list doubles as a roll call of the 2021 crowd, with AMC, BlackBerry, Bed Bath & Beyond, Koss and Nokia on it next to GameStop.

Then it came apart. GameStop fell as low as $40.59 by February 19 (as traded), about 92% below the high. Anyone who bought the January 27 close was down about 88%. Then it climbed back above $100 by the end of February. Within six weeks, both "it's going higher" and "it's over" had been wrong at least once.

It got told as retail against Wall Street, the forum crowd squeezing the hedge funds that were short GameStop. Some funds did close their shorts at significant losses. SEC staff also found that funds long GameStop made significant gains, that quantitative and high-frequency funds traded the rally profitably, and that "hedge funds broadly were not significantly affected by investments in GME and other meme stocks." Less satisfying than the movie version. It's what the report says.

AMC, June 2021

AMC was the second big one. On June 2, 2021, it hit an intraday high of $72.62 (as traded), almost double its previous intraday record of $36.72, then closed at a record $62.55 on more than 710 million shares, halting several times along the way, per CNBC's report from that day. On an adjusted chart today, that high shows as $726.20.

AMC used the rally. The day before, it had reported selling 8.5 million newly issued shares to a hedge fund for $230.5 million, the latest in a series of capital raises. A spike lets a company sell stock at a price the business never earned, and companies notice.

The same prices side by side, so an old headline can be checked against your chart.

If a price in an old article doesn't match your chart, check which side of the split it's on before you read anything into it.

What Does a Meme Stock Chart Look Like?

A meme stock chart has a shape you learn to spot. A quiet base, then a volume spike. A near-vertical leg far above VWAP, broken up by pauses. A blow-off top with long wicks, then the give-back. Real runs skip or repeat parts of it.

Volume is the tell

Volume is the most visible hallmark. The bars go from nothing to many times normal, and they can stay there for days. GameStop averaged about 100 million shares a day from January 13 to 29, 2021, against about 6.7 million a day through 2020. On an intraday chart that shows up as volume bars dwarfing everything to their left. A relative volume reading puts a number on how unusual it is, and that guide covers reading it off a screenshot.

Extension, pauses and the top

Price runs far above VWAP and the 9 and 20 EMAs and stays there. In a normal momentum move, the pullback to VWAP or the 9 EMA is the entry. In a meme run there often isn't one until the move breaks.

Meme stock volatility cuts both ways, with daily moves of tens of percent. Under the Limit Up-Limit Down rules, if a stock's price moves outside its band for more than 15 seconds, trading pauses for 5 minutes, per the SEC's investor alert on short-term trading in hot stocks. On the chart a pause is a gap or a hole in the bars. The guide to volatility in stocks covers sizing when candles get this big.

Near the top you tend to see long upper wicks, a failed retest that prints a lower high, and candles closing near their lows. A failed retest after a spike reads a lot like a bull trap, and it catches the same people.

Meme stock vs an ordinary momentum stock

On a scanner the two look the same, huge relative volume and a big move. What differs is what drives the buying and how it ends. The momentum trading strategy playbook covers the ordinary version.

The setup rules stay the same. What changes is how much of the outcome depends on things you can't see.

What the chart shows, and what it can't

A meme stock is a label about where the buying comes from. A chart only shows the footprint the buying leaves, meaning the volume, the extension, the wicks and the failed highs. The things that decide a squeeze or a collapse live somewhere else.

So a chart, and any grade built on one, can't call a squeeze or a top, and can't tell you whether the crowd comes back tomorrow. A squeeze, a news spike and a hype spike can draw identical candles.

Where a chart grade fits

SnapPChart reads one chart screenshot that you upload, so everything in the "No" rows above is invisible to it, and so are live prices. It can't tell you whether a stock is a meme stock. A meme stock chart gets graded on the setup like any other stock chart, and a high grade says nothing about the company or the hype.

What it does read is the footprint. It can flag an Extended/Parabolic Move, a deduction of up to 13 points that keeps the setup out of the A+ tier. It can flag a chase, when price hasn't retraced to the entry level, and price stretched too far from the 9 EMA. On a long, price below VWAP can count as a no-go, and so can a big red volume bar from a hidden seller on the visible chart, and a no-go grades F. The plan itself can come back as wait for a pullback to a named level, or skip. When the setup is worth planning, now or after that pullback, a full analysis gives you an entry, a stop and targets, and the first target has to pay at least 2:1.

None of that makes a meme trade safe. It turns a vertical candle into either a plan with a stop you picked before getting in, or a reason to pass. There's more on what AI chart analysis reads off a screenshot, and the AI trading guide has a section on what AI can't see on a chart.

How Do Meme Stock Runs Usually End?

Mostly the same way. Attention moves on, buying dries up, and price gives back most of the spike, leaving late buyers holding the losses. GameStop fell about 92% from its high in three weeks, and per the SEC even that low was still above where it started the year. Late buyers lost most of it anyway.

The people who make money mostly sell into the run, early. Nobody reliably knows when the top is in, the loudest posters included, and GameStop's bounce back above $100 shows the timing problem cuts both ways.

Companies can end it too. AMC sold new shares into its 2021 rally and GameStop did the same in 2024 (next section), which means more supply landing on the same crowd.

Losses can be large, and on a collapsing small company, total. Only put in money you could lose completely without it changing anything important.

That's why most sources file meme trading under speculation. You're betting on other people's behaviour over hours or days, with the business mostly beside the point. Whether it becomes gambling depends on how you trade it, which the post on whether day trading counts as gambling gets into.

Some people did make life-changing money in 2021. Those stories are real, and they're the exception. The feed shows you winners because winners post. Bagholders mostly don't.

Is it manipulation?

A crowd buying a stock it likes isn't automatically illegal. Pump-and-dump schemes use the exact same channels, though. The same SEC alert describes how one works: "in a pump and dump scheme, fraudsters pump up a company's stock price by making false and misleading statements to create a buying frenzy, and then sell shares at the pumped up price." If the loudest account pushing a ticker owns it and says nothing about selling, notice that. It happens most in low-priced names, and the penny stock guide has a section on how a pump and dump plays out.

Is the Meme Stock Craze Over?

It comes back in waves. The cleanest recent example is dated and sourced. In May 2024, Keith Gill posted on X for the first time in roughly three years. On May 13, GameStop rose as much as 110% intraday and was halted multiple times for volatility, per NBC, after closing the previous Friday at $17.46 (already post-split). AMC was up 75% that day when NBC reported it.

The company sold into it. GameStop sold 45 million new shares for about $933.4 million, then another 75 million for about $2.137 billion, according to its May 24, 2024 share-sale release and its June 11, 2024 release on EDGAR. That's 120 million new shares and roughly $3.07 billion raised into the attention. Good for the balance sheet. Extra supply for anyone hoping the price would keep going.

Another wave will probably come, on some ticker. Which one and when, nobody knows, and I'm not going to guess at a list.

Crypto runs the same play with meme coins, the same attention loop with even less underneath. If that's your market, the guide to reading meme coin charts covers the volume and wick reads that carry over.

How to Trade Meme Stocks If You Do It Anyway

This isn't a recommendation to trade them. If you're going to anyway, these are the parts you control.

1. Size small. Small enough that a gap through your stop, or a pause that freezes you in the trade, is survivable. Size off the stop distance, never off how excited the thread is.
2. Plan the exit before you enter.Where you're wrong, where you take profit, how much you sell into strength. Write it down. Paper hands is how most of the 2021 winners won.
3. Know what a stop can't do. Investor.gov's page on types of orders is blunt about it: "When the stop price is reached, a stop order becomes a market order," and a market order "does not guarantee the execution price." In a spike, or when trading reopens after a 5-minute pause, the fill can land far past your stop. Treat the stop as the exit you planned and the fill price as whatever the market gives you. The stop loss guide covers what happens when price gaps past a stop.
4. Don't chase the vertical candle. If price is stretched far above VWAP and the 9 EMA, the choices are a pullback to a level you can define risk against, or no trade.
5. Check what the chart can't show. Float, short interest, recent share sales, the halt history. Small floats move hardest in both directions, which the stock float guide explains.

If you're thinking of buying one as an investment rather than a trade, the basics apply. Build an emergency fund and clear high-interest debt first. Diversify, so one stock can't sink the account. Read the company's filings and recent news before you buy (EDGAR is free). And lower-risk options exist, with index funds and ETFs the obvious ones.