Memes are not a harmless, childish distraction; they have a real impact on investor behaviour and could be clouding the judgment of Reddit investors.
A new study, Are Memes a Sideshow: Evidence from WallStreetBets, finds a clear link between online meme activity and trading behaviour.
Memes are used as a humorous coping mechanism, with meme activity surging when companies issue disappointing earnings. Memes “lead to a surge in virality and engagement in the discussion” of individual stocks.
Highly-memed stocks get more social media activity, “often encouraging investors to hold on to them”. Retail investors place fewer sell orders of highly-memed stocks, delaying the market’s response to bad news.
Parties’ general election manifestos struggle to make the figures add up
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
Forget faking news articles to pump and dump stocks. All you need these days is a catchy meme.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
