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Originally Published: Jan 27, 2021
Originally Published: Jan 27, 2021 Last Updated: Jan 10, 2024 9 min read

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Wall Street Bets Stock Market
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Can an army of everyday traders on Reddit win a war against Wall Street? Yes, if you look at GameStop’s soaring stock.

The video game retailer recently attracted the attention of short sellers — hedge funds and investors that bet on a company’s share price dropping — thanks to layoffs and dwindling sales. But these institutional investors seemed to ignore a threat bubbling up from a very specific corner of the Internet.

What is happening to GameStop?

Members of the subreddit r/WallStreetBets, known for pumping stock prices of cult names like Tesla, started a bull case for GameStop about twenty-one months ago when one member included in a post that the company's valuation “does not reflect the current earnings power,” Bloomberg News reported. A case for why the share price was about to soar came later in the form of a post aptly titled “Bankrupting Institutional Investors for Dummies, ft GameStop.”

Just four months later, GameStop’s stock has seen a 700% year-to-date rally, and short sellers — nicknamed "fat cats" by one of the subreddit’s moderators — are paying the price. So who are these individual investors that managed to turn a “meme stock” into a nightmare for hedge funds?

What is WallStreetBets?