Mind Your Meme Stock

A little over a year ago, on July 12th, 2021 to be precise, on the recommendation of a friend of my daughter, I invested a small amount in a small Canadian company called Mind Medicine ($MNMD).

It's not been one of my better bets, as the chart for the past year (above) clearly shows, but with a much larger investment in Tesla up 1,304% currently, it's money I can afford to lose. As Yahoo Finance stated:

Mind Medicine is a company very few people have heard of.

It was certainly a new name to me at the time, and its profile states, it is "a clinical stage biopharmaceutical company, develops novel products to treat brain health disorders related to psychiatry, addiction, pain, and neurology."

Something of a longshot in other words, and after months of steady declines in its stock price, all of a sudden I see that:

Its stock is up almost 50% today. Why? A college student made roughly $110 million trading Bed Bath Beyond, according to SEC filings. After a Financial Times report showed the student is also heavily invested in Mind Medicine, traders seem to have decided to pile in. Welcome to the meme stock club, Mind Medicine.

Things may be looking up. Definitions first, and:

A meme stock is a stock that gains popularity among retail investors through social media. The popularity of meme stocks is generally based on internet memes shared among traders, on platforms such as Reddit's r/wallstreetbets. Investors in such stocks are often young and inexperienced investors.

Many of you are probably familiar with the term 'meme', and while I've never jumped on a meme stock bandwagon, that I possibly find myself on one by default is somewhat interesting. I did jump on the Bitcoin bandwagon via a trust ($GBTC), but that has so far proven to be even more of a loser than $MNMD. A large element of FOMO drove that poor decision.

Some of the language on the r/wallstreetbets suggests a high degree of immaturity, but maybe that's just me becoming a grumpy old man. These bets are highly speculative and volatile and stocks often trade at prices that are above their estimated value based on fundamental analysis so be careful and don't get greedy if you are playing this game.