The history of WallStreetBets, the Reddit group that upended the stock market with a campaign to boost GameStop (2024)

Over the past week, stocks in GameStop, AMC theaters, and a multitude of other seemingly fading companies have soared in value. For stockbrokers and traders, these massive price hikes seem like an anomaly — but those plugged into the online forum Reddit aren't shocked. The spikes follow a targeted wave of enthusiasm aiming to boost the stock valuations from members of the subreddit r/wallstreetbets.

For many, the GameStop rally might be the first time they've heard of the community, but r/wallstreetbets is actually a relatively old subreddit with deep ties to internet culture.

The language used on posts in the community can be crude and boorish — they describe themselves as "autists" and proudly exclaim how little they know about the market. But if you can move past the crass outer shell, you can find an almost-coherent community of like-minded individuals who want to flip off the hedge fund managers and make money for the little guy.

r/WallStreetBets has become a new training ground for would-be investors, aided by apps like Robinhood and WeBull that allow anyone with a bank account to become a trader. But how did this sub grow to nearly 5 million self-described "degenerates" and inspire scrutiny from the SEC?

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WallStreetBets Started in 2012

The WallStreetBets subreddit was created in 2012 by Jaime Rogozinski while he was working as an information technology consultant for the Inter-American Development Bank in Washington, DC according to the Wall Street Journal. The 39-year-old who lives in Mexico City found that while visiting internet forums in the early 2010s, he would be told by fellow investors that his investing style "akin to gambling" wasn't going to work out.

"When I created the sub, I was looking for a community, a place for people to talk about high-risk trades in an unapologetic way for people to make some short term money with disposable income," Rogozinski told TMZ Live on Wednesday. "The progression of WallStreeBets throughout the years has been nothing short of amazing."

—TMZ (@TMZ) January 28, 2021

Over the next few years, r/wallstreetbets remained fairly small and niche. According to subreddit stats, the sub didn't break 100,000 subscribers until 2017. During these early years, the sub was still trying to find its identity but it still had notable events.

Martin Shkreli, the "pharma bro" who is serving a seven-year prison sentence for securities fraud, was a common voice on the sub and a moderator. In June 2016, he proposed a ban on the word "YOLO," meaning "you only live once" because the "term undermines the central point of investing" and "this 'roll the dice' mentality is amateurish: I have never heard it in 15 years on Wall Street."

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The "YOLO" mentality of buying whatever is a crucial theme on the sub and is still commonly seen today.

WallStreetBets had a mod uprising

By 2020, the sub had ballooned to over a million subscribers and was full of novice traders sharing their gains, losses, and memes. Rogozinski published a book about his experience in January and in March announced the "Wall Street Bet Championship." This trading competition was to be held at the Esports Stadium Arlington and featured 12 contestants that would each put in $50,000. The event was sponsored by the True Trading Group, with moderator StormWillPass posting that users that want to talk "negatively" about the company will be "banned."

This caused quite a bit of drama on the sub, with users finding connections between the moderators and the True Trading Group. According to the Daily Dot, moderator Arigold212855 appeared to admit in a leaked private message that "TTG gave WSB 6 figures to back them" and that they are a "part owner of TTG." In April of 2020, the sub mysteriously went private only for it to unprivate itself briefly to post a message from the moderators.

"WSB has been liberated," wrote mod ITradeBaconFutures. "The OG mods are working to get the band back together with those that were run off."

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According to a message posted on the WallStreetBets Discord, Rogozinski had been removed as a moderator because "he was found to be attempting to sell rights to the subreddit to a cut-rate trading team called 'True Trading Group.'" When users tried to visit the sub, the message confirmed the founder's ousting.

There's no record the Wall Street Bets Championship took place after the controversy.

With an unshackled group of moderators, r/WallStreetBets was about to reach entirely new heights.

Tesla made the sub go vroom

By mid-2020, constant posts about money made from Tesla trades and meme stocks, investments made that don't make sense by traditional metrics but simply catch-on online, created a new gold rush, where users wanted to jump on that bandwagon to financial stability. User ETHBAGHOLDER claimed that they turned $3,000 into $102,000 by taking investment advice from the sub. Another user, osbetel, claimed he turned $5,000 into over $300,000 by investing in Tesla. Deepf---ingValue has become a bit of a folk hero, posting daily updates on his "YOLO" stocks that he says he's invested nearly a million dollars into.

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By December of 2020, the sub had grown to 1.8 million subscribers and was full of screenshots of the app Robinhood, one of the more popular apps used to invest.

How r/wallstreetbets made headline news

In January 2021, with the pandemic raging and financial instability abound, the sub grew to previously unimaginable heights. It gained over two million subscribers in a few days and, and now has the most comments and posts created in one day on the entirety of Reddit according to subredditstats.

Thousands of new users flocked to the sub after users successfully popped the valuation of several stocks, including GameStop. Last week, GameStop stock was worth $40 but due to the purchasing efforts of the members of r/wallstreetbets, it ballooned to a high of $492. Purchasing power usually reserved for hedge funds was now in the hands of the people.

The subreddit's Discord server was banned on Wednesday, with the company telling The Verge that they "decided to remove the server and its owner from Discord for continuing to allow hateful and discriminatory content after repeated warnings."

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"We're suffering from success and our Discord was the first casualty. You know as well as I do that if you gather 250k people in one spot someone is going to say something that makes you look bad," mod zjz wrote in a post after the ban. "Discord did us dirty and I am not impressed with them destroying our community."

The sub has now gone mainstream, with even their idol Elon Musk tweeting about WallStreetBets. Robinhood and other trading apps have halted trading on GameStop stocks and the traditional world of money is having to come to terms with this ragtag group of users changing the shape of modern investing.

—Elon Musk (@elonmusk) January 26, 2021
The history of WallStreetBets, the Reddit group that upended the stock market with a campaign to boost GameStop (2024)

FAQs

What Reddit group caused GameStop? ›

Notably, it seemed to originate on social media, especially the r/Wallstreetbets subgroup of Reddit. Users there saw GameStop's stock price receding due in part to the pandemic, and approximately 140% of the public stock was sold short, meaning some who had borrowed the stock had re-lent it.

What happened with GameStop and WallStreetBets? ›

Observers congregating around r/wallstreetbets believed the company was being significantly undervalued, and with such a large amount of the stock being short they could trigger a short squeeze, by driving up the price to the point where short sellers had to capitulate and cover their positions at large losses.

How did Reddit defeat Wall Street with GameStop? ›

Essentially, a hive mind of average people on Reddit took on 'Wall Street' by coming together to put a 'short squeeze' on GamesStop stock, after some big hedge fund players bet against the video game company to fail. In short...“A Hedge Fund bet GameStop would fail. A Reddit community rallied against them.

How did WallStreetBets manipulate the market? ›

The strategy of WallStreetBets was to buy small cap and heavily shorted companies. The reason for small cap stocks was because they have much smaller daily average volumes and less shares outstanding.

How much did Keith Gill make on GameStop? ›

The profit on Keith Gill's GameStop trades

It consisted of two parts: 5 million shares of GameStop stock purchased for $21.27, worth approximately $116 million at the time of the post. 120,000 June 2024 $20 call options purchased for about $5.68, worth nearly $66 million at the time of the post.

What was the GameStop scandal? ›

In early 2021, ordinary retail investors mounted an assault against Wall Street hedge funds. Mobilizing on Reddit and relying on user-friendly trading apps like Robinhood, amateur investors sparked a short squeeze in the market for video game retailer GameStop's GME -3.5% stock.

Why did WallStreetBets get banned? ›

Reddit informed Rogozinski that his account was suspended for violating company policy by "attempting to monetize a community," the lawsuit noted. The lawsuit alleges that "people use Reddit to market and sell everything from investment advice to bodily fluids."

What is the story behind WallStreetBets? ›

WallStreetBets was founded in 2012 by Jaime Rogozinski, a then-30-31-year-old American citizen. "When I created the sub, I was looking for a community, a place for people to talk about high-risk trades in an unapologetic way for people to make some short term money with disposable income," Rogozinski told TMZ Live.

Is WallStreetBets illegal? ›

Levine: The closest illegal act that could be brought up against WallStreetBets would be market manipulation. There is nothing illegal in telling a group of people what they should and should not buy in terms of stock advice, which was not binding and not from a professional.

How much did Redditors make on GameStop? ›

It's not clear. In April 2021, Gill posted a spreadsheet on Reddit showing his GameStop stock was worth approximately $34 million.

What is the true story behind GameStop? ›

This is called a short squeeze. This is what happened with GameStop. Redditors found out that some big Wall Street hedge funds were making a quick buck off failing GameStop shares, so they banded together and bought a bunch of stock to drive up value — and teach the hedge fund traders a lesson.

Who lost the most from GameStop? ›

8 Hedge Funds that Lost Money Betting Against GameStop
  1. Melvin Capital. During the first three months of 2021, Melvin Capital lost 49 percent of its investments. ...
  2. Light Street Capital. ...
  3. White Square Capital. ...
  4. Point72 Asset Management. ...
  5. Citron Capital. ...
  6. D1 Capital Partners. ...
  7. Maplelane Capital. ...
  8. Candlestick Capital Management.
Sep 27, 2021

Who is the famous guy on WallStreetBets? ›

Keith Patrick Gill (born 1986) is an American financial marketer and educator and individual investor known for his posts on the subreddits r/wallstreetbets and r/SuperStonk.

Who was shorting GameStop? ›

Left told Benzinga he started going short on GameStop (GME) this week again after shares in the company surged on excitement over a series of cryptic posts on the social media platform X, formerly Twitter, by investor Keith Gill, who is better known by his pseudonym Roaring Kitty.

What is the banana analogy for GameStop? ›

Simple Analogy: Imagine bananas costing $10 each. Some 'snakes' (big banks) borrow bananas from an 'ape' (an investor), sell them, hoping to buy them back cheaper. But other apes buy all bananas, driving up the price, and forcing snakes to buy back at higher prices.

What did the Redditors do to GameStop? ›

Redditors found out that some big Wall Street hedge funds were making a quick buck off failing GameStop shares, so they banded together and bought a bunch of stock to drive up value — and teach the hedge fund traders a lesson. Shorting shares in GameStop cost hedge funds a total of $US12.

What caused GME to rise? ›

From January 13, 2021, GME shares saw a sudden and drastic increase in price and in return volatility. The run-up was reported to have been led by a large increase in trading by retail investors using the Robinhood Financial platform, organized via social media, in particular the WallStreetBets chat forum on Reddit.

Why did Reddit buy GameStop? ›

How did this start and who is Roaring Kitty? Gill was a discussion leader on a Reddit message board called r/wallstreetbets in 2021. “He essentially thought that GameStop was deeply undervalued, so he bought it, and, as it turned out, the company had a very high shortage,” Earle said.

Who started the GameStop stock trend? ›

Keith Gill
Keith Patrick Gill
Other namesDeepFuckingValue Roaring Kitty
Alma materStonehill College
Occupation(s)Former marketer and financial educator for MassMutual Individual stock trader
Known forInvolvement in the GameStop short squeeze
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