What is going on with GameStop Shares?

The internet and the trading world has been on fire recently with GameStop shares (NYSE:GME) absolutely skyrocketing over the last few days (and specifically in the last 48 hours). The stocks went from $18.81 on the 31st of December 2020 to the current price of $347.51 (27/01/2020). This 16x fold increase in value of GME Stocks has its roots in an erratic trading subreddit called r/Wallstreetbets.

What is Wall Street Bets?

r/Wallstreebets is a subreddit which has now grown to over 3.5 million users. It is self described as “Like 4chan founded a Bloomberg terminal”.The culture of subreddit is similar to 4chan’s where users will gang up together to accomplish spectacular feats – many times simply “for the lolz” and many times in order to fight back against “the man” and to expose systemic weak spots.

But these are not simplistic adolescents who have no real understanding of their actions.A key part of the WSB usersbase is extemely intelligent and is able to recognise vulnerabilities in the marketplace and aims to shake the system up through community organisation online.

There is definitely an element of anti-establishment engrained in the culture of the WSB subreddit and users often rally against Boomers and what they perceive to be a simplistic system to game.

Comments from the a GME post on the subreddit should give you a good idea about the general culture of r/Wallstreebets

So how did Wall Street Bets affect the GME share price?

Well GME was originally mentioned over a year ago by user delaneydi who outlined their GME Investment Thesis in a post last year. Then towards the end of 2020 chatter began to intensify around the GME stock as many users began to express an interest in the stock. As Institutional Investors who had bet against the stock expected the stock price to plummet the community of WSB decided to rally against the institutions and pump the price of GME by buying up stocks.

Check out the explanatory guide below for a better visual explanation of what happened.