Meme Stocks Under Official SEC Investigation

[Vlad Kovalenko + 115]

“GameStop Corp. GME  disclosed late Wednesday that the U.S. Securities and Exchange Commission has asked for its cooperation with an investigation into the unprecedented volatility its stock has seen in recent months. The company also suggested it’s not the only one being probed

It wasn’t alone. Shares of AMC Entertainment Holdings Inc.AMC  fell as much as 8.3%, BlackBerry Ltd.BB  5.2%, Koss CorpKOSS  1.3%, and Nokia Corp.NOK  0.9% in extended trading following the news, with many investors already bracing for SEC commissioner Gensler to take a closer look at the meme stock phenomenon.

“The newly-appointed Wall Street top cop on Monday signaled that meme stocks were on his radar when the agency stated that “SEC staff continues to monitor the market in light of the ongoing volatility in certain stocks to determine if there have been any disruptions of the market, manipulative trading, or other misconduct.”

https://www.marketwatch.com/story/meme-stocks-stumble-after-gamestop-discloses-sec-probe-into-the-frenzy-11623277586

[JohnSmithKalk 0]

With stocks like GameStop and AMC hogging the limelight recently, the term ‘meme stock’ has crept into common stock market parlance and exploded in popularity. Meme stocks are the stocks that see an increase in their trading volumes not because of the company’s financial performance but on the back of the attention on social media or online forums. Such meme stocks generally manage to pique the interest of retail investors. Even as there is a risk-reward tradeoff involved with meme stocks, the volatility associated is much higher than other investments.