GameStop’s stock isn’t the only thing being driven to the moon.
Reddit’s WallStreetBets broke all-time traffic records this week as tens of millions of visitors flocked to the subreddit. Driving the surge is an unlikely face-off between David-like retail investors vs. a hedge-fund Goliath — and David is very much winning.
For the unfamiliar, the r/wallstreetbets subreddit describes itself as “Like 4chan found a Bloomberg Terminal.” In other words, it’s a bunch of internet shitposters interested in making money on the stock market. It can often be hard to decipher what is real and what is a joke on the board, making the whole subreddit an entertaining mess.
According to a source familiar with the subreddit’s traffic statistics, r/wallstreetbets received approximately 73 million pageviews in the last 24 hours alone. The last seven days approached 200 million pageviews, and Tuesday saw approximately 10.5 million unique visitors to the subreddit.
Notably, according to the source, these number surpassed the massive r/wallstreetbets traffic seen around the March 2020 stock market crash.
In December of last year, Reddit said that the site had around 52 million daily active users in October 2020.
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A Reddit spokesperson declined to comment on r/wallstreetbets’ traffic. “We don’t have comment on traffic to the community,” they wrote.
At the heart of this week’s traffic surge is an effort by redditors to profit of the hedge fund Melvin Capital’s short of GameStop (GME) stock. Coordinated on r/wallstreetbets and apps like Discord, redditors bought GameStop options en masse, creating a “short squeeze” which forced Melvin Capital, which bet against the stock, to buy GME to cover its position.
On Wednesday, CNBC reported that Melvin Capital had been forced into retreat — closing out of its short position on GameStop late Tuesday afternoon. While it’s not exactly clear how much Melvin Capital lost, according to CNBC “Citadel and Point72 have infused close to US$3 billion into Melvin Capital to shore up its finances.”
Meanwhile, redditors are calling bullshit on the CNBC report and rejoicing their win.
“Melvin capital have not closed their positions,” claimed one enthusiastic poster. “The squeeze has not been squoze. FUCK YOU MELVIN AND FUCK YOU CITRON. WERE COMING AFTER YOUR SHORTS[.]”
At the time of this writing, GameStock stock is trading around US$326. Last month at this time it hovered around US$21, and in July it was trading at approximately US$4 a share.
It’s unclear what will happen to GME’s price going forward, but with redditors already focusing their attention on other shorted stocks like AMC — and seeing a resultant price surge — traffic to r/wallstreetbets is likely to keep climbing.
And people are loving it.
r/wallstreetbets was more effective at putting Wall Street greed and recklessness in check than the federal government has been in decades.
— Emma Vigeland (@EmmaVigeland) January 27, 2021
Well, people not named Melvin Capital, that is.