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What makes a meme stock a meme stock? Let's find out.
A short-ish (maybe not?) thread. (1/?)
A short-ish (maybe not?) thread. (1/?)
(2/?) First, what makes something likely to meme? In @goodalexander ‘s video on his GAMSI index, he describes that index adds, short squeezes, and gamma stampedes (gama squeezes) are partial catalysts to make something meme.
(3/?) Granted, these are potential technical catalysts that would qualify something to “meme” and explode, but what would make the social interest of a stock go crazy?
(4/?) Taking snapshots from http://highshortinterest.com , we can compare short interest from January 15th, and today. As can be seen, where there were many stocks shorted over 50% of total float. The explosion in late January most likely scared quite a few short-sellers.
(5/?) From a technical side, I can't see anything going crazy for a bit, unless we see a massive amount of gamma on the call side, but we'll put this to bed for now.
(6/?) But what would make a stocks social interest take off? There is one short answer, and that's the folks of WSB. But why do they pick the stocks they do?
1) Humor in products
2) Goofy leadership/ notable "meme-tier" celebrities.
3) Some level of nostalgia.
4) Ticker name
1) Humor in products
2) Goofy leadership/ notable "meme-tier" celebrities.
3) Some level of nostalgia.
4) Ticker name
(7/?) Expanding on each of these.
1) Humor
The humor side of this is a rather complex one to understand, but associative interest is something to look at.
What is currently doing well in the market, sector wise? This is more of a macro level look.
1) Humor
The humor side of this is a rather complex one to understand, but associative interest is something to look at.
What is currently doing well in the market, sector wise? This is more of a macro level look.
(8/?)
1) CONT: in hot sectors, you will see random mentions of things take off. For example, during the EV boom, we saw tweet from our favorite @realwillmeade where he mentioned $SOLO. Within minutes, the share price was vertical.
"But Falcon, why did it continue to meme?????"
1) CONT: in hot sectors, you will see random mentions of things take off. For example, during the EV boom, we saw tweet from our favorite @realwillmeade where he mentioned $SOLO. Within minutes, the share price was vertical.
"But Falcon, why did it continue to meme?????"
(9/?) Well, simply, because it's a ridiculous product so dumb looking it might work.
1) 1 seater car that will not get you a date
2) This thing is $20,000.
3) EV mania right now. As long as EV's are relevant, each news cycle from the company will most likely add gobs of volume.
1) 1 seater car that will not get you a date
2) This thing is $20,000.
3) EV mania right now. As long as EV's are relevant, each news cycle from the company will most likely add gobs of volume.
(10/?)
Examining 2) Goofy leadership and "meme-tier" celebs.
1) With TSLA, one of the reasons for its meteoric rise was the massive buying from retail traders. It almost turned into a feedback loop of gamma squeezes. This was driven by Elon, at least on the social-side of it.
Examining 2) Goofy leadership and "meme-tier" celebs.
1) With TSLA, one of the reasons for its meteoric rise was the massive buying from retail traders. It almost turned into a feedback loop of gamma squeezes. This was driven by Elon, at least on the social-side of it.
2) CONT: Looking at PLTR here.
Alex Karp was memefied on WSB, and for what reason?
1) He practices Qigong meditation, has swords in his office, and is rumored to do martial arts at the office.
2) In the absurdity of that, people on the internet rallied behind the "figure"
Alex Karp was memefied on WSB, and for what reason?
1) He practices Qigong meditation, has swords in his office, and is rumored to do martial arts at the office.
2) In the absurdity of that, people on the internet rallied behind the "figure"
(12/?)
3) Nostalgia.
The piling of GME and AMC wasn't just because they had high short interest; it's because they were brands people remembered from their childhood. In the social media generation, these brands helped raise people, so there is inherent bias towards keeping
3) Nostalgia.
The piling of GME and AMC wasn't just because they had high short interest; it's because they were brands people remembered from their childhood. In the social media generation, these brands helped raise people, so there is inherent bias towards keeping
(13/?)
3) CONT: these companies floating. It's like parting with one of your favorite toys when you were younger. You can't just get rid of it without thinking of all the great times you spent with it. This same logic applied to a lot of these stocks.
3) CONT: these companies floating. It's like parting with one of your favorite toys when you were younger. You can't just get rid of it without thinking of all the great times you spent with it. This same logic applied to a lot of these stocks.
(14/?)
4) Ticker name. This one is slightly self explanatory. It's partially the reason why DOGE has had a meteoric rise these last few weeks, coupled with the "meme king" Elon pumping it.
4) Ticker name. This one is slightly self explanatory. It's partially the reason why DOGE has had a meteoric rise these last few weeks, coupled with the "meme king" Elon pumping it.
4) CONT: An example with BBW. During all the madness, this got pumped. Not due to short interest, but because of the name. It's inherently funny. Same can be applied to YOLO, CAKE, SLIM, and others. Here is the tape from BBW during the madness, and some google search trends.
(15/?) I keep messing up the numbers.
4) CONT: As you can see, there was no uptick in google trends for BBW or build a bear, so the name hilarity was identified by someone, or algos, and picked it up. This also works as a nostalgia piece, part of my point 3.
4) CONT: As you can see, there was no uptick in google trends for BBW or build a bear, so the name hilarity was identified by someone, or algos, and picked it up. This also works as a nostalgia piece, part of my point 3.
(16/?)
4) CONT: This last example of this is from r/stocks, and summarizes the entirety of point 4.
4) CONT: This last example of this is from r/stocks, and summarizes the entirety of point 4.
(17/18) Almost done.
The relevancy of comedy in todays society can be the social catalyst for many of these stocks. Browsing stocktwits, twitter, reddit, and even Instagram can yield mention of some the points above, and provide tickers for you to put on your watchlist.
The relevancy of comedy in todays society can be the social catalyst for many of these stocks. Browsing stocktwits, twitter, reddit, and even Instagram can yield mention of some the points above, and provide tickers for you to put on your watchlist.
(18/18)
I might do a more in-depth writeup on why memestocks can meme, coupled with some data analysis on search activity or relevancy. I think this does some slight justice in explaining why a memestock can meme, but considering I wrote this over breakfast, there's more to add.
I might do a more in-depth writeup on why memestocks can meme, coupled with some data analysis on search activity or relevancy. I think this does some slight justice in explaining why a memestock can meme, but considering I wrote this over breakfast, there's more to add.
