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Game Stopped? WallStreetBets in search for the next meme-stock

By Daniela Ešnerová and Heleen Oude Nijhuis

13:09, 21 December 2021

Phone screen showing the WallStreetBets forum in front of the Reddit logo
Are people still using WallStreetBets for inspiration? – Photo: Shutterstock

Reddit and meme-stock trading didn’t start the retail trading revolution, but they sure turbo-accelerated it. As the GameStop (GME) saga hit headlines in January 2021, millions of novice investors downloaded trading apps and millions of new subscribers joined Reddit’s forum WallStreetBets (WSB) for inspiration on which stocks to buy.

Now, some 11 months on, people are still following WSB trends, according to analysis by What price movements would a new trader jumping on the WSB bandwagon in the wake of GME madness be looking at? delved deep into the data.

Enter WallStreetBets 

In January 2021, as the stock price of embattled video game-shop chain GameStop started rising sharply – reaching gains of 2,716.32% in just two weeks – all eyes turned to what had, until then, been a niche corner of the internet – r/WallStreetBets. Here on this subreddit forum, a community of amateur traders would meet to chat, using a specific language full of memes and self-deprecating humour about stocks they believed were a bargain.

Launched in 2013, WSB was mostly hidden from the mainstream for the majority of its existence. Its membership first started growing in the autumn of 2019, when major US retail investment platform Charles Schwab scrapped fees for trading on its platform, thereby kicking off a price war across the market and forcing its competitors to follow. 

This was some four years before a host of challenger companies – most notably Robinhood – ushered in the commission-free trading model. 

Chart representing rise in WallStreetBets’ subscribers from November 2012 to November 2021WallStreetBets’ subscribers from November 2012 to November 2021 – Source: Reddit

Then pandemics and subsequent lockdowns brought another influx of subscribers to WSB. In February 2020, a novel coronavirus (Covid-19) spread from Asia to Europe, sparking a market crash and distorted valuations across sectors and regions. Amateur investors took to studying the frenzied markets, hoping to pick companies on discount in the midst of all the chaos. 

In March 2020, lockdowns swept across the United States. As some used extra time to learn how to bake banana bread, others took to trading. And the WSB community grew. 

“A lot of it has to do with the fact that sports betting shut down, along with other avenues where somebody would be able to gamble, which is what WallStreetBets, at the end of the day, is really geared towards – [to shutting] down casinos,” says Michael Haupt, a former moderator of WSB and a former financial adviser.

Haupt gave us an insight into the community’s daring psyche and motives.

WSB use began spreading among self-directed investor circles on the internet and the platform began getting a reputation for its bold investment bets, as well as its specific humour. 

“[The] r/wallstreetbets is like reading a Twitter exchange between an alt-right Trump militia and a discord-safe space for the morally injured,” wrote a contributor nicknamed ‘Anthony Saver’ last November on MoneySavingExpert

“It [/wallstreetbets] absolutely is not for easily offended but gives an idea into the madness. Though I would never suggest following a single strategy that is being followed there,” wrote another debater nicknamed norsefox.

Enter GameStop & the meme-stock craze 

“The truth of the matter is 90% of the plays that take place on WallStreetBets lose at the end of the day,“ Haupt says. “Ultimately, almost every single one of our picks are losers.” 

A year ago, a not-insignificant part of the WSB community picked their “loser” – GameStop. The already struggling brick-and-mortar shop was tipped to be among the big losers of the pandemic by many institutional investors. But not by WallStreetBets’ traders. 

A WSB user, nicknamed ‘Roaring Kitty’, had a deep conviction that GME had been undervalued for years. In 2019, he wrote his first post on WSB, detailing why he believed that to be the case. While the post did not gather traction at the time, Roaring Kitty started streaming videos where he analysed GME fundamentals and made his case for his bullishness.

On 8 December 2020, GME shares tumbled after the company missed Wall Street’s expectations in its quarterly earnings and announced that it had shut another 74 stores in the period. In reaction, short sellers raised their bets.

GME had short interest above 50% since 2019, which increased steadily to hover around 100% before eventually hitting a high of 109.26% on 31 December 2020. WSB made a note and took to stock-buying en masse in the hope hedge funds would have to close their bets and face losses. 

On 27 January 2021, one hedge fund, Melvin Capital, closed its short position in GME. A narrative then emerged about how ordinary people had taken on and outsmarted professional investors – contemptuously dubbed “suits” by this Reddit traders army in their own game. An attempt at a short squeeze began.

The story had everything: bad guys represented by hedge funds and the financial elite; good guys represented by WSB traders; and vengeance for the 2007/08 financial crash, which caused profound damage to so many people while the Wall Street giants behind the crisis ended up being bailed out by taxpayers.

Traders around WSB took to buying a handful of other companies en masse, causing share-price swings and swaying media headlines across the world. This movement came to be known as meme-stock trading. 

Inspired by the prospect of whopping returns – and perhaps also the desire to feel a part of the fight between the Davids and Goliaths of finance – record numbers of people took to downloading trading apps to get in on the action. A new class of investor was born.

Enter the new amateur trader

Though many newcomers to trading could not join in on the GME action after Robinhood and other trading platforms restricted buying GME shares and other meme-stocks in the middle of the craze citing market volatility, the mind-boggling rally on 28 January attracted a new type of audience to investing. 

Younger, proportionally more female, and coming from more diverse ethnic and economic backgrounds, this new wave of investors was twice as likely to use Reddit for financial advice, according to a survey by the UK’s financial regulator, the Financial Conduct Authority. 

Once only a fringe forum, WSB was suddenly thrown into the global spotlight and its subscribers ballooned by seven million in just two months of GME frenzy – a tenfold growth in just a year. 

Did these fresh joiners stick around after the January/February frenzy cooled off? Do investors still turn to WSB for investment inspiration? And did those stocks that became popular on WSB ever come close to GameStop’s price surge?

WSB a year on:’s analysis 

Some 11 months after the initial meme-stock mania, WSB still serves as an investment guide for many,’s data reveals. 


146.25 Price
+0.340% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.14


234.03 Price
-0.070% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.16


130.14 Price
+5.190% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.29


15.44 Price
+6.890% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.13

Analysis of’s trading-platform data shows that the stocks that became the most discussed on WSB soon saw their trading volumes jump.

In the week after a stock first made it to the top-three most-mentioned posts on WSB on a given day, its trading volumes on the platform jumped on average 51% compared with the month before. Both contract-for-difference and spread-betting trading volumes on average increased 39% the week after an asset first became more WSB-popular than it was a month before.

So how did the particular stocks that made it onto the WSB’s most-discussed ones each day over 2021 perform over time? has crunched the numbers.

1. Original meme-stocks beat oil 

The share price of WSB 2021’s top-five most-mentioned stocks increased on average by 279% from the nine months since they first made it to the most-discussed stocks on WSB. For example, oil – an asset that soared in 2021 – grew by 61% over the same period.

But there’s a catch. All of these stocks made it to ‘most-mentioned’ status on WSB between 8 January and 2 February, before or around the time the forum first came to mainstream attention. At that time, most first-time investors who were unaware of WSB before the GameStop mania would have been already too late to that party. 

On 28 January, investment platform Robinhood restricted buying GME shares and other meme-stocks, and other platforms followed. 

The limits weren’t lifted until 5 February, so the newcomers couldn’t realistically bag on the initial share-price increases. 

2. How did WSB’s meme-stock hopefuls perform throughout the year?

Share-price increases of WSB’s 2021 top-five most-mentioned stocks are unusually high, but a closer look at the performance of all the stocks that became the hottest topics on WSB throughout the year paints a very different picture. 

Stocks that made it to the most-discussed daily ones on WSB performed better over the short term – but even then, these stocks’ share prices decreased after three days in as much as half of the time. 

This trend further increased over longer investment periods. Of WSB’s meme-stock hopefuls, 51% saw their share price drop after a week, 59% after a month and 66% after three months (see table below).

Graphic illustrating the split in positive and negative returns on popular WSB stock over three days, a week, a month and three monthsPositive and negative returns on most-mentioned WSB stocks – Credit:

A simple S&P 500 tracker fund gave better results than the stocks that made it to the most-discussed ones on WSB did on average, after over just a month of holding (see the figure below).

In six months, the index fund grew 14.6%, while on average, the most popular stocks on WSB fell -5.4% over the same period.

“Buying individual stocks is very risky. Of course, we always tend to hear about the stocks that make people money in the short term. But only a very small proportion of stocks provide strong returns in the long run, and identifying them in advance is a huge challenge,” warns Robin Powell, head of client education at the UK independent financial advice firm RockWealth.
“The value of a stock can easily halve, or even reduce to zero, because of factors the average trader knows nothing about. If all or most of your money is tied up in a stock, or a sector, that suddenly tanks, you’re in real trouble.”

Graphic illustrating difference in returns from WSB popular stocks and S&P 500 Index for 3 days, a week, a month, three months and six monthsDifference over time in returns from WSB’s popular stocks and S&P 500. Past Performance is no guarantee of future results – Credit: tracked investment returns of stocks that became WSB’s favourites throughout the year; see results below.

Interactive heatmap: 2021 returns of the most-mentioned stocks on WallStreetBets

Here, you can view in detail what investment returns buying WSB’s most popular stocks gave to investors over different investment periods in 2021. Be advised, however, that past performance is no guarantee of future results.

A year on: WallStreetBet’s legacy 

Events around WSB and its attempts to boost an embattled video game-shop chain’s share price, while teaching the finance elite a lesson in the process, will forever be a unique episode in textbooks about financial markets. 

However, one particular event sparked a lot of interest from regulators across both sides of the Atlantic, including a US Congressional hearing.  The spectacle brought together CEOs of Robinhood, Reddit, hedge funds and Roaring Kitty – Gamestop’s early bull, who is known by the legal name of Keith Gill, and who acted as an effective WSB representative. At the time, the GME price was increasing in real life as Gill was explaining to the Congress why he is bullish on the company. “In short, I like the stock,” he concluded. 

Representatives and regulators were investigating possible market manipulation. This included Robinhood’s business model “order-for-payment-flow”, which allows the platform to trade its clients without fees while making profits from selling their information to other market participants, such as hedge funds, and trading apps’ “digital engagement practices” – in other words, the technological features of trading applications that could be seen as nudging users to trade. 

At the time, it seemed that the episode could potentially lead to a slew of new regulations. However, some nine months later, a report by the US market regulator the Securities and Exchange Commission (SEC) concluded that the market worked efficiently during the meme-stock trading turmoil and hailed the broadness of the market participation. 

The local regulator is considering improving requirements for reporting of short sales in the wake of GameStop to bring it up to line with the UK’s rquirements. Meanwhile, on the other side of the Atlantic, the Financial Conduct Authority (FCA) has upped its campaigns aimed at the newer, less-experienced investors who are actively teaching them about risk. 

So, did WSB stick it to the man? 

Several individual hedge funds – including those who had shorted GME – incurred significant losses in the wake of an army of traders around WSB pumping the share price with the motto “to the moon” at the beginning of the year. Those hedge funds that had long positions in the company benefitted.

“Staff believe that hedge funds broadly were not significantly affected by investments in GME and other meme stocks,” concluded the SEC’s investigation. Moreover, many losses were incurred by retail investors joining the GME rally at its height.

“Democratisation of the market” 

WSB accelerated tectonic shifts in the already-dynamic retail-investor market. It inspired a record number of people to sign up for trading, and its meme-stock trading movement brought new audiences to capital markets. These new audiences are both younger and are proportionally more female. They are also coming from more diverse backgrounds, according to the FCA. 

Along with the AMC episode, the GameStop episode was a perfect storm – a unique moment in history that required a remarkable concurrence of events. It may never repeat again, but it has left lasting effects on how people engage with the markets that may well last forever.

“The democratisation of the market is going to take place, ” WSB’s Haupt says. “But what that means for equity for everybody, and from the lowest rank all the way to the top – demographically, gender-wise, you name it – everything everybody's going to be able to participate in is a wealth-generation process now. 

“And I think that’s a huge boon, not just for investments in the world of finance, but for people and their sense of belonging to a global community.”


Will GME go up?

Price of GME stock can go up as well as it can go down. Prices in GameStop – the original meme-stock – are extra-volatile due to the fact it became a subject of bets and speculations, and thus GME price action is at times divorced from fundamentals.

In December, the share price for GME plunged to the lowest levels since the January/February meme-trading episode.

Will AMC go up?

The price of AMC Entertainment – the other firm at the centre of the meme-trading in January and February – can go up as well as down. Moreover, price movements of AMC shares are even less predictable after the company became subject to pump and dump schemes.

Similarly like GME, AMC shares also sunk to the lowest level since January/February meme-trading episode.

What is a meme-stock?

Meme-stocks are public companies hyped on social media and showing huge short-term gains.

None of the stocks that became the most discussed on the WSB forum after the January/February frenzy came close to the original short-term gains. 

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