Meme Stocks and Herd Behavior

6 Pages Posted: 27 Aug 2021

See all articles by Arash Aloosh

Arash Aloosh

Neoma Business School

Hyung-Eun Choi

NEOMA Business School

Samuel Ouzan

Neoma Business School

Date Written: August 23, 2021

Abstract

Equity market seems to go viral. The recent epic surge in AMC stock price just three-month following the GameStop short squeeze episode might indicate that meme stocks are unlikely to be an epiphenomenon. This letter explores the investment behavior of meme stock traders, particularly concerning their tendency to exhibit herd behavior. We define the meme stock market as an equally weighted index of stocks whose purchase the Robinhood app restricted during the GameStop short squeeze episode. Over the last two years, using hourly data, we provide robust evidence that herding in meme stocks occurs beyond the brief short squeeze episodes.

Keywords: Herding Behavior, Market Efficiency; Meme Stocks; Social Trading

JEL Classification: G14; G12

Suggested Citation

Aloosh, Arash and Choi, Hyung-Eun and Ouzan, Samuel, Meme Stocks and Herd Behavior (August 23, 2021). Available at SSRN: https://ssrn.com/abstract=3909945 or http://dx.doi.org/10.2139/ssrn.3909945

Arash Aloosh

Neoma Business School ( email )

1 Rue du Maréchal Juin,
Mont Saint Aignan, 76130
France
+33232824736 (Phone)

Hyung-Eun Choi

NEOMA Business School ( email )

1 Rue du Maréchal Juin
Mont Saint Aignan Cedex, 76825
France

Samuel Ouzan (Contact Author)

Neoma Business School ( email )

1 Rue du Maréchal Juin
Mont Saint Aignan Cedex, 76825
France

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