The Reddit message board that’s breaking the internet by sending Wall Street into a frenzy was briefly taken private by its moderators on Wednesday, adding further confusion to a wild day.
“We have grown to the kind of size we only dreamed of in the time it takes to get a bad nights sleep,” they said. “We’ve got so many comments and submissions that we can’t possibly even read them all, let alone act on them as moderators.”
The moderators also said several Twitter accounts were trying to impersonate them.
“@wsbmod is the only Twitter handle whose statements are directly from some part of the team.”
While it was private, a subreddit called WallStreetBetsnew, meanwhile, gained more than 100,000 followers in around 30 minutes on Wednesday evening. That subreddit was established in March last year. On it, users urged their peers not to panic. Others encouraged buying even more stocks in revenge for the outage.
“REVENGE BUY TOMORROW! THEY SHOOK THE WRONG TREE! LETS GET IT GOING TOMORROW MORNING BOYS,” one user posted.
Reddit told CNN Business that the moderators of WallStreetBets chose to take the forum private, and the company was not involved in the decision.
The subreddit, describing itself through the tagline “Like 4chan found a Bloomberg terminal“, is known for its aggressive trading strategies, which primarily revolve around highly speculative, leveraged options trading. Members of the subreddit are often young retail traders and investors who ignore fundamental investment practices and risk management techniques, so their activity is considered gambling. The growing popularity of no-commission brokers and mobile online trading has potentially contributed to the growth of such trading trends. Members of the communities often see high-risk day trading as an opportunity to quickly improve their financial conditions and obtain additional income. Some of the members tend to use borrowed capital, like student loans, to bet on certain “meme stocks” that show popularity within the community.
GameStop short squeeze
On January 22, 2021, users of r/WallStreetBets initiated a short squeeze on GameStop, pushing their stock prices up significantly. This occurred shortly after a comment from Citron Research predicting the value of the stock would decrease. The stock price increased more than 600% by January 26, and its high volatility caused trading to be halted multiple times.
On January 24, 2021, a moderator of r/WallStreetBets wrote in a post stating: “There is NO organized effort by those [of] us who moderate this community to promote, advise or recommend any stock. It is against our policy to do so and we feel it is crucial to allow members to be able to share their ideas amongst each other with autonomy.”
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