Reddit's WallStreetBets Group Goes Rogue After Wild Week Of Trading

Social media comments and conversations on popular Reddit boards like WallStreetBets are helping to drive up the price of stocks that have been mostly shrugged off by top analysts. The online social phenomenon is somewhat reminiscent of the Occupy Wall Street movement as it catches the trading world by storm.

Similar to the Occupy Wall Street movement against corporate greed in the 2010s, Reddit users are using the trade phenomenon as a rallying cry of sorts. Big investment firms place bets on companies like GameStop that underperform using a so-called short trade. That’s a bet at a higher price that the stock will eventually decline, giving traders a reward from the difference. So-called retail investors, however, are using GameStop as a sort of protest against the established norm, refusing to sell and egging others to buy or hold their stocks out of defiance.

"In one sense, this is 'Occupy Wall Street' via the trading desk rather than from Zuccotti Park," David Kirsch, a professor at the University of Maryland's Robert H. Smith School for Business, told CNET.

“Dude these hedge funds literally believe they own the market because, well, they were sort of allowed to do so for so long, lol they’re in for a rude awakening,” one Reddit board commentator posted Thursday.

Comments on the Reddit discussion board WallStreetBets are behind a rally in stocks that would otherwise sell for bargain-basement prices.

GameStop, a retail video game outlet, sells the same items available online and at big-box chains like Best Buy. But its share price, valued at $280 at 11 a.m. E.T., was more than twice that of Best Buy.

“CANT STOP WONT STOP GAMESTOP,” one user posted on Thursday.

The WallStreetBets message board was closed briefly Wednesday, fueling the speculation surrounding the strange trading trends behind the rally. Reddit said the moderators chose to go private with the forum. But later, a new discussion board, WallStreetBetsnew, popped up and gained a quick following. Some 100,000 new users in a matter of a half-hour, to be exact.

Returning to its public status by Thursday, WallStreetBets is boasting hundreds of thousands of users. A daily discussion thread for the day has more than 40,000 comments, with many of them boasting of their influence.

“It’s not about the money,” one person posted on WallStreetBets. “It’s about the message.”

Meanwhile, on Twitter, those behind the Reddit thread complained after the trading platform Robinhood restricted trade for GameStop and others stocks supported by the online community.

But it’s not just on trade. Bloomberg news reported that the communications platform Discord barred the forum because it allowed for “hateful and discriminatory content after repeated warnings.”

The results of the social media phenomenon, meanwhile, have real-world market implications. Shares of GameStop (GME) are so volatile that they frequently trigger a circuit-breaker mechanism that halts trading if there’s excessive movement over a brief period of time.

As of 2:34 p.m. ET, shares of GameStop were trading at $229.05, down 34.09%.