By now most people, even those vaguely tuned into investing, have heard the phrase "meme stock."

People might remember in 2021 when GameStop, AMC Entertainment, Bed Bath & Beyond and Koss Corp. were the talk of Wall Street and small investors bid up the stock prices driven by online forums and phrases like "to the moon" or "diamond hands" and using the rocket and diamond emojis. It was almost like a new language was invented and only those with the Rosetta Stone could understand what was being talked about.

Then the hype around GameStop cooled and it seemed like meme stocks were done.

That was mostly true until July 22 when a new crop of meme stocks popped up including Menomonee Falls retailer Kohl's Corp, Krispy Kreme, Wendy's and GoPro.

So for those who missed the original Wall Street meme stock ride, here's what to know about this unusual corner of investing:

What is a meme stock?

To understand what a meme stock is, people need to understand the basics of what a "meme" is.

A meme is a image or short video shared online typically from television, movies, sports, politics or popular culture that's usually meant to be funny. A joke picture, basically, that can be applied in difference conversations that people have online.

On the "stock" side, it only applies to publicly traded companies with a low valuation. Companies like Tesla, Apple, and Alphabet (aka Google) would not be meme stocks because shares of those companies cost hundreds of dollars.

Meme stock companies generally have shares that are less expensive, like $20 or less per share, so that more people can buy the shares. For example, if someone bought 10 shares of Kohl's stock for $100, before the stock went crazy, they could have doubled that money if they they sold when it was at was at its highest during the last week. And if it goes higher, then the more money can be made.

So you pair "meme" (a joke) with "stock" from the financial world, and get "meme stocks."

FILe - In a Thursday, May 12, 2016 file photo, the Kohl's logo appears above its trading post on the floor of the New York Stock Exchange. A new year season is biting back at Macy’s and Kohl’s early in the new year, with the duo’s shares tumbling in premarket trading on Thursday, Jan. 5, 2017, following news that they had trouble bringing shoppers into their stores to buy presents. (AP Photo/Richard Drew, File) ORG XMIT: NY108

So a "meme stock" is a big joke?

Not really. There is real money behind each of these stocks both from the company, investors and short sellers. In 2021 people who bought or owned GameStop shares when it was in the $2 and $3 per share range, made thousands of dollars.

And notably Melvin Capital, which had a very large short position against GameStop, lost billions of dollars and closed because of this trade.

Has anyone locally made money off of meme stocks?

Absolutely, yes.

Domo Capital Management, based locally in Germantown, was one of the first firms that saw potential in GameStop. In 2023, firm founder Justin Dopierala talked to the Milwaukee Journal Sentinel about how he got involved in GameStop and how his firm benefited from that trade.

“It’s common to be early and so the key is to leave room to be able to keep investing on the way down,” Dopierala said in 2023. “Even with GameStop. We were investing at higher levels before it got down to the low single digits where it really just became, all of a sudden, an absolute no-brainer. And we significantly concentrated a lot of our assets into it.”

Dopierala was also featured in a documentary "GameStop: Rise of the Players," which explored the rollercoaster ride.

What is a meme stock?, So a "meme stock" is a big joke?, Has anyone locally made money off of meme stocks?, How do meme stocks get decided?, Why is Kohl's a meme stock?

For Milwaukee-area headphone maker Koss Corp., it was definitely not a joke as the company stock soared going from roughly $3 per share to more than $120 per share.

Even in this recent wave of meme stock activity with Kohl's some money has been made. Kohl's Chief Marketing Officer Christie Raymond had a pre-trading plan in her contract that was adopted in November 2024.

How do meme stocks get decided?

This is a bit more difficult to describe as there's no real formula behind each meme stock. However like the original form of "meme' it takes place online.

WallStreetBets forum on Reddit was, and in many ways still is, a prominent place to learn which stocks could be the next meme stock. Users share tips, make predictions, and talk about which companies they're watching.

Reddit isn't the only area where these discussions are had.

Keith Gill, who goes by the name Roaring Kitty on YouTube and X, has a gigantic following and was another person who was in early on GameStop.

Gill uses memes often on social media and followers will try to interpret what he's talking about. For example, in 2024, Gill tweeted a movie scene involving someone listening to music on headphones and his followers thought he was talking about Koss.

Why is Kohl's a meme stock?

Kohl's has been struggling financially for the last several years, posting a streak of declining quarterly sales going back more than two years.

It also has a huge short position against it meaning every time the stock goes down, hedge funds who bet against it make money. And when the stock goes up, hedge funds have to pay money to cover their shorts or could sell their position.

That's a big reason why Kohl's is a attractive stock for people online. They want to stick it to the hedge funds.

Jim Cramer, host of Mad Money on CNBC, gave some advice to hedge funds on his show on July 22, "cover and move on."

"Kohl's was a textbook example of a stock that had become perfect for the GameStop playbook," Cramer said adding the firms with short positions should have cashed out when the stock was around $6.

"The shorts have made a killing over the past couple of years on this one... the shorts have clearly overstepped their boundary with Kohl's. They've run into a buzzsaw of their own creation. Even now I think they'd be wise to cover their short and move on before they have another GameStop on their hands."