Reddit group r/ WallStreetBets (WSB) has closed its doors and is now a private-only community. What Happened: Only users who moderators have approved will be able to view the page and take part in discussions. Why This Matters: WallStreetBets is the group that initiated the mega GameStop Corp GME 0.85% short squeeze at the end of January. They managed to drive the price of GameStop to over $400 while causing massive damage to hedge funds that shorted it, such as Melvin Capital.
WSB stood together while brokerages like Robinhood (which recently filed for an IPO) banned buying “meme stocks” and driving fear in the market. Coining the phrase “Diamond Hands,” the group has managed to rally together all retail traders who took up trading during last year’s lockdown.
More recently, the group had pushed AMC Entertainment Holdings Inc
to over $70 in the middle of June.
Before this shutdown, WallStreetBets had over 10 million members
Reported by Benzinga via Stock Sharks
The stock market battle between retail investors on internet platform Reddit, most popular through the ten million strong WallStreetBets group, and hedge funds has shaped market dynamics in the first half of the year. Retail investors have mostly tried to spoil the short-selling attempts of hedge funds, driving up the prices of stocks being sold short to deliver devastating losses to some of the biggest hedge funds. Earlier this month, London-based White Square Capital, that bet against WallStreetBets, announced that it would close down for good.
Some of the stocks presently popular on the forum include Tesla, Inc. (NASDAQ: TSLA), Advanced Micro Devices, Inc. (NASDAQ: AMD), ContextLogic Inc. (NASDAQ: WISH), and Palantir Technologies Inc. (NYSE: PLTR), among others. These stocks can offer handsome returns to investors in the coming months as hedge funds are also bullish on them. Since they do not represent an avenue for the retail investor versus hedge fund battle, they will be safe from perhaps the most influential market force of the year, affording these firms breathing space compared to others.
Calls for regulation around internet-based stock trading, which Redditors employ through the use of applications like Robinhood, have been growing in recent months. Robinhood has been forced to halt trading in some highly volatile stocks over the past few months despite strong protest from retail investors as the application, which has more than 13 million users – mostly around 30-years-old – realizes the responsibility it has to provide a level playing field to everyone in the marketplace, be it Redditors or billion dollar hedge funds.
Reported by Yahoo Finance
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