Reddit group WallStreetBets behind large GameStop, AMC calls turn into personal, invitation required
Rafael Henrique | SOPA Pictures | LightRocket via Getty Images
The Reddit chat room “Wallstreetbets”, in which private investors compete against short sellers, was privatized on Wednesday evening and restricted access to outsiders.
The community gathered an army of rookie day traders who were heavily shorting, pushing stock prices higher, and crowding out short selling by hedge funds. Forum members exceeded three million on Wednesday.
“You must be invited to visit this community,” it says on the page. “We are experiencing technical difficulties with the newfound interest in WSB on an unprecedented scale. We cannot ensure that Reddit’s content policy and rules are enforceable without a technology platform that can help automate that enforcement. WSB will be back.” . “
GameStop, a popular Wallstreetbets destination, saw its shares rise more than 400% this week alone. The brick and mortar video game retailer has soared a whopping 1,700% as retailers continued to encourage each other to stack.
Another hot topic in the chat room, AMC Entertainment, surged more than 300% on Wednesday alone, posting its highest volume ever.
GameStop fell more than 20% in expanded trading on Wednesday while AMC fell more than 38%.
A Reddit spokesperson said “wallstreetbets” presenters are putting the community on private.
“Reddit’s website-wide guidelines forbid posting illegal content or soliciting or facilitating illegal transactions,” the spokesman said. “We will review and work with any valid law enforcement investigation or action as necessary.”
Many of the top posts in the chat room include screenshots of investors’ brokerage accounts showing massive returns from trading GameStop and other names. Some of these avid investors are calling out short sellers in sometimes mundane language and awkward internet memes.
Some on Wall Street were increasingly concerned that the Reddit crowd’s buying frenzy could potentially destabilize the market and hurt general confidence. In the meantime, rising losses from hedge funds could spill over into other areas of the market.
The social platform Discord banned the “wallstreetbets” chat room on Wednesday.
“The WallStreetBets server has been on our Trust & Safety team’s radar for some time as content occasionally violates our community guidelines, including hate speech, glorifying violence and the spread of misinformation,” a Discord spokesman said in a statement.
“In the last few months we have issued several warnings to the server administrator. Today we decided to remove the server and its owner from Discord in order to continue to allow hateful and discriminatory content after repeated warnings,” added the spokesman.
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