TL;DR

Rocket Lab’s stock price was pumped up by online hype, promising massive gains from government contracts and a new rocket. But the promises were largely unfounded, leaving small investors with heavy losses, showing once again how speculation can lead to devastating financial outcomes.

Story

Rocket Lab’s stock (RKLB) soared, fueled by Reddit’s WallStreetBets hype. The narrative? Government contracts worth billions, a revolutionary rocket (Neutron), and guaranteed riches. Sounds familiar? Like the dot-com bubble or the 2008 housing crisis, this was a perfect storm of hype and speculation.

The mechanics were simple: pump and dump. An online frenzy drove up the price, attracting inexperienced investors dreaming of quick riches. Then, as always happens with these schemes, reality bit. The projected contracts weren’t guaranteed; Neutron’s launch was delayed; and the promises of billions in revenue were far from certain.

The human impact? Countless small investors poured their savings into RKLB, hoping for a life-changing return. Many, likely including those who confessed to investing their “entire life savings,” saw their investments plummet. It’s a story as old as finance itself: desperation meets deception.

The lessons? Always, always do your due diligence. Don’t chase hype. Don’t trust get-rich-quick schemes. A company’s valuation should reflect its fundamentals—not the enthusiasm of an online forum. Remember Enron and WorldCom; their spectacular collapses were also preceded by similarly unrealistic projections.

This saga ends as most do: with a sobering reminder that speculation is a high-stakes game where most players lose. The pump-and-dump schemes that have been around for decades are still prevalent today, and they’re still preying on people’s financial vulnerabilities. The only difference today is that the mechanisms have gotten more sophisticated.

‣ Pump and Dump: A stock manipulation scheme where the price is artificially inflated (pumped) to then be sold off (dumped) by the manipulators at a profit. ‣ Due Diligence: Thorough research into a company’s financial health, market position, and management before making an investment.

Advice

Ignore online hype; diversify your portfolio; never invest more than you can afford to lose; and always, always do your research.

Source

https://www.reddit.com/r/wallstreetbets/comments/1np7c9f/rklb_is_the_next_best_thing/