The market has a new meme stock contender after Trump Media & Technology Group Corp. (NASDAQ:DJT) rocketed higher in its Nasdaq debut.
The term "meme stock" is loosely defined and often used to describe trendy stocks that are popular among retail investors. Steve Sosnick, chief strategist at Interactive Brokers, listed three "hallmarks of a meme stock" during an interview with Yahoo! Finance on Wednesday.
According to Sosnick, the three distinctive features meme stocks are:
- Quasi-religious fervor
- Disregard for fundamentals
- High short interest
Quasi-Religious Fervor: Sosnick believes the first defining characteristic of a meme stock is a devoted group of shareholders who are loyal to the stock with a "quasi-religious fervor." He pointed to AMC Entertainment (NYSE:AMC) shareholders who call themselves "apes" as a prime example.
Sosnick suggested that former President Donald Trump's fiercely ...