Member-only story
2021, the year of retails investors or how Wallstreetbets beats Wall Street
Wallstreetbets, meme stocks, Gamestop, Robinhood, Dogecoin, Elon Musk, et al.
At this point in time you’ve probably already heard about Wallstreetbets, short squeeze and Gamestop stock (and other meme stocks), but let’s start with a quick recap.
Wallstreetbets is one of popular subreddits (5m users at this point), online forums living within the Reddit ecosystem, focused on making bets on the stock market. Members particularly like putting money into call options, which if successful, allows them to make a huge profit, while if not… well, they basically expire worthless. It’s usually a huge casino made out of stocks.
Squeeze through banding together. Last year one user (DFV), noticed that Gamestop (GME) is so heavily shorted (over 140% of the stock), that if the trend would reverse and GME would start rising, hedge funds would need to start buying GME too to cover the losses. That in turn would pump the price even higher. Which is exactly what happened in the last weeks.
In response, due to the frenzy, Robinhood and other popular trading platforms stopped taking new orders on GME, causing an uproar on wallstreetbets (with lawsuits following).
