Muppet Bait

AAA

DEFINITION of 'Muppet Bait'

Naive investors who are lured into buying hot stocks or securities that the smart money and/or insiders are selling. "Muppet bait" was popularized by Henry Blodget, a former Wall Street analyst and co-founder of news site Business Insider. Individuals and groups who fall under this category often follow news and hype behind initial public offerings, rather than perform their own research.

INVESTOPEDIA EXPLAINS 'Muppet Bait'

In a May 2012 interview with CNN, Blodget attributed the genesis of the term coined by him to Goldman Sachs' emails, in which they disparagingly referred to their customers as "Muppets." The Goldman emails were mentioned in the course of an op-ed article by a Goldman Sachs executive director in The New York Times on Mar. 14, 2012 titled "Why I Am Leaving Goldman Sachs." The article bemoans the culture at Goldman Sachs as having become one where the only priority is making the most possible money off clients, often by pitching lucrative and complicated products even if these products were not aligned with the clients' goals.

RELATED TERMS
  1. Hot Hand

    The notion that because one has had a string of successes, he ...
  2. Smart Money

    Cash invested or wagered by those considered to be experienced, ...
  3. Cooler

    A slang term used to describe someone considered to have bad ...
  4. Insider

    A director or senior officer of a company, as well as any person ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Oversubscribed

    A situation in which the demand for an initial public offering ...
RELATED FAQS
  1. How do corporate actions affect floating stock?

    Corporate actions, defined as a company's actions that affect the amount of outstanding company stock shares, can either ... Read Full Answer >>
  2. What are the advantages and disadvantages of listing on the Nasdaq versus other stock ...

    The primary advantages for a company of listing on the Nasdaq exchange are lower listing fees and lower minimum requirements ... Read Full Answer >>
  3. What securities does the primary market deal with?

    The primary market deals with all newly issued securities. When businesses, governments or other groups want to raise capital ... Read Full Answer >>
  4. What's the difference between investment banks and commercial banks?

    Investment banking and commercial banking are two divisions of the banking industry that provide substantially different ... Read Full Answer >>
  5. What are some of the key reasons a large corporation might prefer to remain a private ...

    The initial public offering (IPO) is often a rite of passage for large corporations. The lure of going public with an offering ... Read Full Answer >>
  6. Why is Manchester United (MANU) carrying so much debt?

    The takeover of Manchester United by the Glazer family beginning in 2005 saddled the historic club with substantial amounts ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Spotting Sharks Among Penny Stocks

    To protect yourself from an attack, don't swim in this ocean.
  2. Investing Basics

    Analyst Recommendations: Do Sell Ratings Exist?

    Analyst reports can be an investor's best friend - but without knowing how to read them, you won't be able to fully utilize them.
  3. Investing

    5 Tips For Investing In IPOs

    Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
  4. Personal Finance

    The Ups And Downs Of Initial Public Offerings

    Initial public offerings aren't the best option for every company. Consider these factors before "going public."
  5. Investing Basics

    IPO Lock-Ups Stop Insider Selling

    Ownership plays a key role when companies go public. Find out how.
  6. Economics

    What are Deliverables?

    Deliverables is a project management term describing an object or function that must be provided or completed by a certain due date.
  7. Economics

    What Happens in a Carve-Out?

    A carve-out happens when a corporation isolates part of its business and shares those profits with a third party.
  8. Stock Analysis

    Are These America's 5 Best CEOs?

    Do great leaders lead to great investment opportunities? Here's a few to consider.
  9. Professionals

    What Does Corporate Finance Do?

    Corporate finance is the subset of finance that involves how corporations use leverage to fund their operations and capital purchases.
  10. Entrepreneurship

    How to Exit Your Small Business with Grace

    Here is a guide for how best to leave your baby — your small business.

You May Also Like

Hot Definitions
  1. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  2. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  3. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!