Reddit and its Influence on Meme Stocks
Reddit made national headlines in early 2021 for its role in the volatile movement of the so-called meme stocks popular among its “subreddit” user communities like WallStreetBets. Currently, there is no steadfast definition of what constitutes a meme stock. One common thread across many being pitched on social media is a focus on heavily shorted companies.
Social platform and aggregator Reddit is back in the news, and WallStreetBats is not the only one moving markets, as there are other popular investing communities on Reddit. But WallStreetBets is the largest investing community. At the moment, WallStreetBets has more than 10 million members. WallStreetBets formed the genesis of the meme stock community that dominated news coverage several months ago.
Key features of this investing community are its vulgarities and memes. Over the years, WallSteetBets established a distinctive lingo that sets it apart, bringing terms like “stonks” and “tendies” into the popular lexicon.
The second-largest subreddit community on investing is r/stocks, it has 2.8 million members. Millions of members provide a more sober outlook on markets compared to WallStreetBets. There are no posts regarding broadcasting gains or losses. Rather, members tend to provide analysis of companies, ask questions about dividends, or discuss the impact of broader economic conditions. The community on r/stocks offers a very different environment than WallStreetBets, appealing to another type of Reddit investor.
Similar to r/stocks, r/investing attracts more serious people than most investing forums associated with Reddit. Instead of memes, it is a place for its 1.9 million members to discuss news and events relevant to investors. Although it heavily resembles r/stocks, the former is broader in scope, with people discussing topics important to the economy as a whole.
Reddit and investing communities
Another interesting community is r/pennystocks. Members “astronauts” search for gains by investing in lesser-known companies in the hopes that they will make it “to the moon”. Amazon, as well as Apple, are largely on r/pennystocks, but American Battery Metals Corp was tipped for greatness. The stocks may be small, but this community isn’t, at 1.6 million members and counting. Like other investing communities, discussion threads center around the stock analysis and company news, but this community offers a more extensive focus on over-the-counter securities.
A haven for clients of the popular online brokerage firm, r/robinhood claims 820,000 investors to its name. The most common topics on the forum are troubleshooting issues. This community stands out for its utility in helping members navigate the platform. Memes and jokes about Robinhood and investing in general also characterize this community. However, the forum’s attention to helping others make r/robinhood an essential tool for anyone on the app.
