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 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. Stock Analysis

    How American Express Counts on Your Profligacy

    Consumers like novelty, reliability, variety, and other subjective qualities. But what really keeps them coming back to American Express is convenience.
  7. Fundamental Analysis

    Why would I need to know how many outstanding shares the shareholders have?

    Find out why shareholders should know how many outstanding shares have been issued by a corporation, and learn what happens when more shares are issued.
  8. Investing Basics

    What's the difference between primary and secondary capital markets?

    Learn how in the primary capital market, securities are issued for the first time, while in the secondary market, investors trade securities that have already been issued.
  9. Stock Analysis

    How CVS Grew Into a Drugstore Giant

    Want proof that brick-and-mortar businesses aren't dead? Just look at this company.
  10. Investing Basics

    What is the difference between an IPO and a seasoned issue?

    Learn how companies issue IPO securities when they first go public and seasoned issue shares if they sell more shares in the secondary market.

You May Also Like

Hot Definitions
  1. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  2. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  3. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  4. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  5. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center