What is Wall Street Bets Really Saying?

It’s been a turbulent time in the stock market since the pandemic hit, but as you may well already know, there’s no stock that’s more applicable to than GameStop.

One year ago GameStop (GME) was trading at just $2.85 USD per share. It’s currently trading at around $190 USD per share, although that is far from a steady price. It peaked at $483 USD in February. What the heck is going on?

Retail traders that frequent the now infamous subreddit r/WallStreetBets recognized in January 2021 that hedge funds were heavily shorting the stock. In response, they have been buying and holding GME to trigger a “short squeeze,” forcing short sellers to cover their positions and further drive up the price.

Their notoriety isn’t just because of their market plays though, but also because of the culture that exists on the forum. Posts with meticulous due diligence demonstrating high levels of understanding of the financial system are usually paired with memes and self-deprecating jokes. Members are self-proclaimed “apes” with “smooth brains” and “diamond hands,” getting “tendies” for their “wife’s boyfriend.” Those that have made big profits from GME often make posts donating games purchased at GameStop to children’s hospitals, or doing their simian ancestry proud by adopting a real mountain gorilla. It’s as if an unusually charitable frat collectively got business degrees from Wharton.

Membership of the subreddit has also increased from just around 3 million members in January to almost 10 million today, many of them new investors hoping to also get rich quick. It’s not uncommon to see articles proclaiming the “next big thing” being pushed by the Redditors, from silver to AMC Entertainment.

So what are they actually saying on Wall Street Bets? Well, I can show you.

The graphic presented is a “Word Cloud” generated from the top 200 comments on each of the top 100 posts on WallStreetBets from the last month - 20 thousand in total. The more prominent the word, the more often it appears. The most common words in the English language, like “the” and “a” have been filtered out.

Right. So. What did we learn from this exercise?

Honestly, it’s kind of hard to say. If nothing else, WallStreetBets has generated a new level of interest from retail investors in the stock market. Investing can be intimidating, but millions are witnessing a bunch of so-called “apes” make big plays for millions of dollars. Many newbies clearly want a piece of the action.

Ask any “smooth-brain” on Reddit what they think of the matter, and I predict you might get the same answer.

“This is not financial advice. We just like the stock.”