Can behavioral finance theories explain the recent surge in meme stock popularity?

In recent years, the stock market has witnessed an unusual phenomenon where stocks of struggling companies have experienced dramatic price surges, largely driven by social media communities and retail investors. Dubbed "meme stocks," these investments often defy traditional financial analysis and logic. To understand this trend, we can turn to behavioral finance—a field that studies how psychological factors influence investment decisions. Could concepts like herd behavior, overconfidence, and loss aversion shed light on why and how these meme stocks gain traction, despite their often questionable fundamentals? Exploring this connection might reveal insights into the broader implications of social media on market dynamics and individual investor behavior.