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The role of Reddit in the GameStop short squeeze

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  • Anand, Abhinav
  • Pathak, Jalaj

Abstract

We present evidence that the tone of r/wallstreetbets (WSB) discussions displayed significant predictive associations with intraday GameStop variables and that the comment distribution obeyed a power law and in fact it was 462 users whose posts most impacted GME.

Suggested Citation

  • Anand, Abhinav & Pathak, Jalaj, 2022. "The role of Reddit in the GameStop short squeeze," Economics Letters, Elsevier, vol. 211(C).
    • Handle: RePEc:eee:ecolet:v:211:y:2022:i:c:s0165176521004808
    DOI: 10.1016/j.econlet.2021.110249
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    References listed on IDEAS

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    1. Del Gaudio, Belinda L. & Megaravalli, Amith V. & Sampagnaro, Gabriele & Verdoliva, Vincenzo, 2020. "Mandatory disclosure tone and bank risk-taking: Evidence from Europe," Economics Letters, Elsevier, vol. 186(C).
    2. Torben G. Andersen & Tim Bollerslev & Francis X. Diebold, 2007. "Roughing It Up: Including Jump Components in the Measurement, Modeling, and Forecasting of Return Volatility," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 701-720, November.
    3. Marinč, Matej & Massoud, Nadia & Ichev, Riste & Valentinčič, Aljoša, 2021. "Presidential candidates linguistic tone: The impact on the financial markets," Economics Letters, Elsevier, vol. 204(C).
    4. Petra Kralj Novak & Jasmina Smailović & Borut Sluban & Igor Mozetič, 2015. "Sentiment of Emojis," PLOS ONE, Public Library of Science, vol. 10(12), pages 1-22, December.
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    Citations

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    Cited by:

    1. Miyuki Matsumoto & Ryuji Hashimoto & Masahiro Suzuki & Yuri Murayama & Kiyoshi Izumi, 2025. "Impact of information disparity between individual investors on profits of meme stocks using an artificial market simulation approach," Journal of Computational Social Science, Springer, vol. 8(1), pages 1-29, February.
    2. Georgios Fatouros & Konstantinos Metaxas & John Soldatos & Dimosthenis Kyriazis, 2024. "Can Large Language Models Beat Wall Street? Unveiling the Potential of AI in Stock Selection," Papers 2401.03737, arXiv.org, revised Apr 2024.
    3. Suchanek, Max, 2024. "Social interactions in short squeeze scenarios," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 898-919.
    4. Nobanee, Haitham & Ellili, Nejla Ould Daoud, 2023. "What do we know about meme stocks? A bibliometric and systematic review, current streams, developments, and directions for future research," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 589-602.
    5. Daniel Pastorek & Michal Drabek & Peter Albrecht, 2023. "Confirmation of T+35 Failures-To-Deliver Cycles: Evidence from GameStop Corp," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 73(1), pages 56-80, January.
    6. Warkulat, Sonja & Pelster, Matthias, 2024. "Social media attention and retail investor behavior: Evidence from r/wallstreetbets," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    7. Yousaf, Imran & Pham, Linh & Goodell, John W., 2023. "The connectedness between meme tokens, meme stocks, and other asset classes: Evidence from a quantile connectedness approach," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    Short squeeze; GameStop; WallStreetBets;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General

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