The GameStop stock saga was always going to end this way. On the initial upswing, the story was an inspirational David vs. Goliath, with people on Reddit banding together to take down hedge funds that were shorting GameStop stock by buying the troubled stock by the boatload to pump the value up. However, as the situation drags on, trouble is brewing, and the subreddit that started it all is now in turmoil.
The meteoric rise of GameStop stock turned heads, and had folks learning a lot more about “short selling” than they probably ever cared to know. The stock soared over $400 USD on Thursday of last week, before a precipitous drop for GameStop in the days since. The rollercoaster ride has unnerved investors as they try to pick the right time to buy and sell the wildly fluctuating stock. It is not just the stock that has been through a tumultuous week, the subreddit r/wallstreetbets has been on a journey of its own.
When word got out that the investors behind the big run on GameStop stock mostly congregated on a casual investor subreddit, the group that had a few hundred thousand members saw its numbers increase into the millions. Flooded by curious folks interested in what was going on, the huge influx of people created chaos for the moderators of the subreddit. Old mods have returned to the forum and are kicking out current mods after the pressure brought about by new members, the media, and movie deals that are already in the works. Author Ben Mezrich, whose book The Accidental Billionaires served as the basis for The Social Network, will be working on a book about the Reddit/GameStop situation with a movie to come after that.
Opportunistic individuals have been setting up private email addresses to funnel press correspondence to them, in the hopes of gaining some notoriety, according to r/wallstreetbets moderator ‘zjz.’ There is genuine concern that r/wallstreetbets will cease to exist in its current form, done in by the insane level of attention directed at it. With so many eyeballs watching, the temptation to take advantage of the situation has created a power struggle that could be difficult to sort. While the subreddit crumbles, it should also be noted that GameStop is likely still at risk of going out of business, the company still needs to address the issues that have been plaguing it for years.
The whole situation should have been a rebuke against the wealthy and the entire culture around the stock market. Instead it has fallen into disarray. The Discord server for r/wallstreetbets was also shut down temporarily for hate speech violations, so tempers have been flaring up all over the place. Time will tell if the subreddit will be able to pull through.
Source: Kotaku
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