Dan Caplinger

We got a question on Fool24 the other day talking about an investor bought a stock, they were interested in the stock, they thought it would potentially 3X in five years.

It turns into a meme stock, it triples in the first month.

And they're like, what do you do?

And it's hard to know what to do in that situation because there is non-fundamental stuff going on that's making that stock go up.

Or it can go the other way.

Sometimes you can actually use the meme stock status to generate a business model to generate cash because investors bid up the stock.

Suddenly, the company can do a secondary offering a stock and raise a bunch of capital that it wouldn't otherwise have been able to raise.

And that doesn't necessarily mean that the company is going to be able to start making money.

Look at a company like AMC, for instance.

They continue to lose money despite all the capital that they raised.

But for GameStop, we've seen GameStop

make some real progress in terms of making its fundamental business better, whether it's shifting its emphasis over to collectibles like Pokemon cards.

They've jumped onto the Bitcoin treasury company strategy, all kinds of things they wouldn't have been able to do if they hadn't had that investor support keeping the stock price up.

I look to management, Travis.

I think that you really need to see how company management responds to their company becoming a focus of meme investor attention.

Often, but not always.

It's the attitude that management takes with it.

For instance, let's get out of the meme stock universe just for a second and go to pharmaceutical stocks, to biotech stocks.

Oftentimes,

biotech stocks, they will report a favorable clinical trial outcome.