WallStreetBets phenomenon: Reddit users say GameStop rocket is revenge of the masses (2024)

For some Reddit users, GameStop's dizzying rocket ride on Wall Street is a case of the masses rebelling against one-percenters hoarding the world's wealth.

For some Reddit users, GameStop's dizzying rocket ride on Wall Street is a case of the masses rebelling against one-percenters hoarding the world's wealth.

The social media-fueled movement has sent shares in the US video game retail chain soaring from less than $20 weeks ago to a peak of $492 on Thursday, dearly costing hedge funds that bet GameStop stock would tank.

GameStop shares ended the formal trading day down some 44 percent as some cashed out. But they lifted off anew after-hours, after Tesla chief Elon Musk seemingly urged individual investors to punish hedge funds for short selling, tweeting "Get Shorty."

A Reddit group -- or "sub-reddit" -- called WallStreetBets that boasts some 4.7 million members has been an online rallying spot for those urging people to buy and hold GameStop shares, punishing short sellers by sending prices soaring.

"We constantly see the 1 percent make trillions a year, even through the pandemic... versus the millions of Americans who had to file for unemployment," Reddit user Responsible-Height77 told AFP via the forum.

"I think it's time to show that the masses have a say and that our voice matters."

The hardship of 2020 inspired the 21-year-old to take part in the campaign to drive up GameStop shares, punishing hedge funds in the process.

The US college student said he has suffered during the pandemic, as have friends who got sick from Covid-19 and who lost livelihoods.

- New players at the casino? -

Hedge funds pounded with losses due to the market-manipulating campaign decried the movement and its sometimes aggressive online tactics as foolish and potentially illegal.

"Gotta admit it's really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino," US Congress member Alexandria Ocasio-Cortez said in a widely shared tweet.

Her comment sparked a contentious exchange on Twitter between those echoing her sentiment and critics.

"Notice how so many complain when the rules they have been manipulating are used against them?" responded a tweet from educator Ken Shelton.

"This is a prime example of what happens when a large group of people get organized and use the system to their advantage."

US Senator Elizabeth Warren expressed similar thoughts, saying that while wealthy investors have prospered in the stock market, it has not represented the economic reality of millions of people in this country.

- Game on -

Responsible-Height -- who declined to reveal his real name -- told AFP that he has been a video game player much longer than he has played the market.

WallStreetBets is tinted with video game culture, the page playfully making use of the well-known Fallout Boy character from blockbuster franchise Fallout.

"Their motto has always been power to the gamer!" the student said. "Which I feel we have taken to ourselves as power to the people."

He reasoned it is people taking back power while applying the basic principle of supply versus demand.

"Investors need to realize the market isn't always driven by fundamentals; we are in a new age where everyone can be involved in the market. And if enough people want a stock it will go up. That's the basics of economics."

WallStreetBets is an open group at Reddit, seemingly driven more by group sentiment than any leader, but championing GameStop shares appears in tune with a millennial, gamer-generation crowd.

Chatter on Reddit has now encouraged similar campaigns for companies with low share prices and a place in old-school US culture such as AMC, BlackBerry, and American Airlines.

- Back to Earth? -

A Reddit user going by the acronym DFV is credited with putting GameStop shares on the launch pad late in 2019, taking a $50,000 stake in the company that has turned into a fortune.

"I'm seeing so many people talking about how their life is going to be changed; this is insane," user DontTrustJack said on the group chat.

"This truly is a moment where the haves transfer money to the have-nots."

But another user advised having an exit strategy, because driving up GameStop shares could cost them if they are holding large stakes when financial reality hits.

"Have a plan guys," cautioned the Reddit member. "The drop will come so fast."

WallStreetBets founder Jaime Rogozinski, who says he is no longer associated with the group, told AFP that he had watched with fascination as small investors wield the power of the crowd.

"They're able to do what Occupy Wall Street was never able to do," Rogozinski said.

"The little guy figured out a different way around it, which was, well, if you can't beat them, join them."

WallStreetBets phenomenon: Reddit users say GameStop rocket is revenge of the masses (2024)

FAQs

What did the Redditors do to GameStop? ›

Redditors found out that some big Wall Street hedge funds were making a quick buck off failing GameStop shares, so they banded together and bought a bunch of stock to drive up value — and teach the hedge fund traders a lesson. Shorting shares in GameStop cost hedge funds a total of $US12.

What happened with WallStreetBets and GameStop? ›

The WallStreetBets investors in GameStop primarily expressed hostility to short selling, in which shares are borrowed and then sold in the expectation of repurchasing them later at a lower price. The shares are then returned to their lender.

Why did GameStop stock boom? ›

(NewsNation) — Gamestop's shares surged in early trading Monday after a Reddit account associated with the trader known as “Roaring Kitty” appeared to reveal a big stake in the video game retailer that may be worth millions. GameStop's stock jumped more than 37% in morning trading.

How did Reddit affect GameStop stock? ›

Rise in stock price and volume

In January 2021, Reddit users on the r/wallstreetbets subreddit built the foundations for a short squeeze on GameStop, pushing up the stock price significantly. This occurred shortly after a comment from Citron Research predicting the value of the stock would decrease.

How much did Keith Gill make from GameStop? ›

The profit on Keith Gill's GameStop trades

It consisted of two parts: 5 million shares of GameStop stock purchased for $21.27, worth approximately $116 million at the time of the post. 120,000 June 2024 $20 call options purchased for about $5.68, worth nearly $66 million at the time of the post.

What was the GameStop scandal? ›

The normie GameStop investors who recognized the opportunity for a short squeeze were right — the stock was over-shorted, they saw their chance, and they seized it. The episode took out Melvin Capital — even after getting extra money injected, the hedge fund eventually went under.

Why did WallStreetBets get banned? ›

Reddit informed Rogozinski that his account was suspended for violating company policy by "attempting to monetize a community," the lawsuit noted. The lawsuit alleges that "people use Reddit to market and sell everything from investment advice to bodily fluids."

Is WallStreetBets illegal? ›

Levine: The closest illegal act that could be brought up against WallStreetBets would be market manipulation. There is nothing illegal in telling a group of people what they should and should not buy in terms of stock advice, which was not binding and not from a professional.

How much did hedge funds lose on GameStop? ›

With GameStop soaring 74%, short-selling hedge funds suffered a mark-to-market loss of $838 million in the brick-and-mortar video game retailer, data firm S3 Partners said.

Why is everyone investing in GameStop? ›

Factors Driving GameStop's Stock

The primary reasons GME stock spiked briefly were the return of Gill and his show of support for the company and its CEO.

Why is GameStop declining? ›

The return of Roaring Kitty

Before his rise to popularity, GameStop had experienced declining sales amid an industrywide pivot from game cartridges to video game streaming and digital downloads.

Is GameStop still being shorted? ›

Now, however, just 20% of all outstanding GME shares are sold short, meaning those short sellers can probably cover their shares more easily and won't be squeezed as hard as in 2021.

Will GME ever recover? ›

Will GameStop stock recover? No one can say for sure if GameStop will ever return to its 2021 highs of over $80 a share. As of 7 October 2022, algorithm forecaster Wallet Investor predicted GME could reach $82.04 in May 2026, while Gov Capital had it at a similar level of $82.03 by November 2024.

What stocks is Wallstreetbets buying? ›

Performance Comparison
  • SPCE. Virgin Galactic Holdings. 6.82. -48.98. -87.78%
  • PLTR. Palantir Technologies. 32.50. 18.00. 124.14%
  • TSLA. Tesla. 222.72. -8.56. -3.70%
  • LCID. Lucid Group. 3.25. -3.01. -48.08%
  • IRNTQ. ― 0.02. -0.02. ...
  • SOFI. SoFi Technologies. 7.46. -0.83. ...
  • AMD. Advanced Micro Devices. 155.28. 47.06. ...
  • PTON. Peloton Interactive. 3.23. -3.79.

What happened to the GameStop guy? ›

Gill dropped out of public life in 2021 after testifying before Congress about his role in the GameStop stock saga.

What exactly happened with GameStop? ›

In the week following GameStop's reaching its peak share price, around $36 billion of value was wiped off of its value, as well as that of four other “meme” stocks that were being traded in a similar fashion. And by March 9, those who had bet against GameStop were facing a total of $11 billion in year-to-date losses.

What did Reddit do to the stock market? ›

Reddit made its long-awaited stock market debut on Thursday, and it wasn't long before interest in the nearly 20-year-old social media company began to surge. At market close, the company's share price settled at $50.44, nearly 50 percent higher than its IPO price of $34 per share.

Did people become millionaires from GameStop stock? ›

Some people bought $300 worth of shares giving them almost 100 shares in the company and when that stock went on its epic climb, they had a joyous payday. Others like Keith 'Roaring Kitty' Gill put their entire life savings into GameStop and became millionaires.

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