© 2021 CyberNews - Latest tech news,
product reviews, and analyses.

If you purchase via links on our site, we may receive affiliate commissions.

Nevermind GameStop – Reddit is on the rise


The app has seen a huge increase in interest post-WallStreetBets.

It’s the app that helped launch a revolution that upturned the old ways of Wall Street, and propelled an unloved, physical bricks and mortar retailer of video games into one of the world’s hottest stocks. Far from GameStop’s share price being the only beneficiary of the rally around it last month, the app hosting the community that helped take it to the moon is also a big winner of the last few weeks.

Mobile installs of Reddit grew by a staggering 43% in a single month between December 2020 and January 2021, as retail investors coalesced around the share trading tips offered on one of the site’s most controversial subreddits, r/WallStreetBets.

In a single month, the number of app installs grew from 4.6 million to 6.6 million, according to data from Finbold.

“Potential traders who missed on the GameStop rally looked forward to the next stock as recommendation content was being posted in the subreddit,” say Finbold. “The subreddit was also responsible for the surge in AMC and BlackBerry stocks. Some of Wall Street's key players feared that the WallStreetBets craze might have long-lasting effects on the market. There were concerns that the buying frenzy could potentially destabilize the entire market and hurt overall confidence."

Controversy reigns about Reddit

The subreddit in question is now under scrutiny as part of a wider investigation into the broader movement of the GameStop, AMC and BlackBerry stock prices. The US Department of Justice has requested information from some of the biggest retail stock trading apps, like Robinhood, in order to try and piece together what happened, and if any market manipulation took place – claims every participant strenuously denies. 

The data analysed by Finbold also shows where some of the keenest investors may well have been located: analysis of Google search trends shows that Canada was the most interested to learn about “Reddit app” when searching for it, with Singapore coming a close second.

The United States, where GameStop is based, and where many of the most active participants in the traded markets were located, was third.

The history of WallStreetBets is a complicated one. Established in 2012 by founder Jaime Rogozinski, it was designed as a place everyday investors could share trading tips that were seen as more aggressive than those exchanged on other forums that existed.

“To the moon” attitude

In part, that’s what may have caused so many everyday investors who got into the GameStop mania late in the day to have lost their money when the stock price of GameStop tanked. They may have overlooked the high risk, high reward attitude of those on the subreddit when compared to traditional investing advice. 

They also invested in the stock when it was at its peak, and before significant app outages, due to issues with cash flow for those handling the trades, and automatic brakes put on certain stocks if they lurch significantly in price. Both these battered confidence in the ability to make money from the stock, meaning people ended up selling up their interests in GameStop and other “meme stocks”, taking the price plunging.

Finbold analysts reckon that although people may have been burned by their investments as a result of Reddit, they will still stick around to take part in the other communities on the app.

Like the scores of quick and easy trading apps that have seen significant rises in their users off the back of the stock trading mania, it seems likely that Reddit will remain a beneficiary for the months and years to come of the 2021 stock market bubble.

Leave a Reply

Your email address will not be published. Required fields are marked