r/WallStreetBets
r/WallStreetBets
History
r/WallStreetBets was created on January 31,2012 by Reddit user Jaime Rogozinski, who goes by u/jartek on the website. Rogozinski created the subreddit because of the absence in high risk, short term trading discussion boards. Most of what he found online was long term, lower risk trading. [28] As of early March, the subreddit has garnered over 950,000 subscribers. [12] The subreddit has become especially known for its users sharing their vast gains and losses. In 2016, Florida teen Jeffery Rozanski caught media attention over his $900 to $55,000 gain in twelve days. [23] Additionally, the forum has been highlighted by major publications for its culture and sense of humor. Bloomberg described it as,
...a smidge of casual racism and a whiff of locker-room misogyny,[27]
In January 30 of 2020, Rogozinski released the book, "WallStreetBets: How Boomers Made the World's Biggest Casino for Millennials."
[25] The book highlights the stories of various subreddit users who have made an impact throughout the years.
Rogozinski explains,
The book basically blames grown ups for creating such a fun, massive, and legal casino where everyone can play.
And of course, the entire book is accompanied by stories from all of you throughout the years.
Some of which you probably remember and some of which you may not.
Around early 2020, the subreddit saw a surge in attention and subscribers due to popular posts from users.
One user in particular, u/WSBgod, began making waves around the subreddit for their gains in the options trading market.
Posted on February 4th, the title simply reads "DON'T DOUBT UR VIBE" which referenced the song title tech entrepreneur Elon Musk produced and posted on January 31, 2020.[29] The post contains an image displaying an unrealized gain of $4,334,132 on Tesla call option.[30] The gain was accumulated over the span of a few weeks. As of early March, the post has over 40,500 upvotes.
Controversies
Robinhood Exploit
In early November of 2019, it became the center of attention for its users finding an exploit in Robinhood's "Margin Trade" feature[18], in which a user with a "Robinhood Gold" subscription is able to take out a line of credit from Robinhood to buy stock, at the starting cost of two-thousand dollars. [19] Reddit user u/ControlTheNarrative was one of the first to find this exploit, as he deposited $2,000, and leveraged $50,000 of stock. Following u/ControlTheNarrative's explanation with as to how to activate this, users began sharing their leverages. Eventually, the "GUH of Fame 2019" was created by user u/SocioButt, honoring the top users who shared their exploitation of the "Infinite Money Cheat Code."[20] The biggest on this list deposited $3,000, and was able to leverage $1,732,640.
| User | Leveraged | Deposited |
|---|---|---|
| /u/controlthenarrative | $48,000 | $2,000 |
| /u/woodc93 | $1,300,000 | $15,000 |
| /u/moonyachts/u/high_on_ford | $1,279,550 | $4,000 |
| /u/Tomatotowers | $314,070 | $5,000 |
| /u/call_warrior | $1,732,640 | $3,000 |
Josh Brown, CEO of Ritholtz Wealth Management, appeared on CNBC to discuss how users "bragged" about the exploit.
These kids are out of their minds they're looking for ways to take reckless risks, and arguably they're doing it to impress their friends on a chat site[21]
Among those who managed to find this cheat, u/controlthenarrative was the most highlighted on the list, as he filmed himself and his phone screen live as the put options he placed through Robinhood disappeared. Common referred to as 'GUH guy' (in reference to the sound he makes in the video as he realizes how much money he's losing), not much is known about what happened after his estimated loss of over $50,000. What is only known is the mark he left on the subreddit. Additionally, the video has over 1.2 million views as of early March.
Concern Over Market Pumps
The subreddit became so much of a spectacle that Bloomberg Businessweek wrote a cover story on it, citing many of its tendencies and recent activity that caused a concern to the greater trade industry. [22] The article stated,
The do-it-yourself traders of r/WSB are waging a kind of guerrilla warfare in the markets, trying to exploit what they see as weaknesses in the system to move prices where they want them.
The concern developed as a result of certain stocks growing exponentially; and to some, mysteriously.
Early 2020 saw the skyrocket in Virgin Galactic's stock, which increased 162% from the beginning of 2020 through mid to late February.
The price and activity of the stock simply did not add up with the increased call volume, which passed over 360,000 contracts on Feb 10.
[31] Tesla, Plug Power, and Lumber Liquidators had similar stories in early 2020, seeing surges and increased trading volumes over the first three months of the year.[32] While the subreddit is not the sole reason for these increases, many in the industry cited retail investors (what many of the subreddits users are) as a possibility for the pumps. Many of these stocks have been referred to as 'meme stocks' on the subreddit. When asked by Bloomberg about the speculation over the subreddit being a pump and dump scheme, Rogozinski replied explaining that the it is not a subreddit wide decision made, but more one person who created a post about a stock, and many followed in the posters footsteps on what to do.
...they're individuals, they're not necessarily as much as the collective of WallStreetBets.[28]
While it has happened a lot on the subreddit, these were not coordinated pump and dumps.
They were user created and many others joined the pump.
Additionally, the subreddit's rules, which are displayed on the sidebar, show the first rule as 'No Market Manipulation'.