Reddit vs. Wall Street: the latest in the GameStop saga

GameStop CEO Ryan Cohen is in line to potentially earn $35 billion in stock options, so long as the company hits a $100 billion market cap. One way to hit that target is by cutting costs, and one way of cutting costs is to close down a bunch of stores. The company closed 590 stores in fiscal year 2024 and said in a recent SEC filing that it anticipates “closing a significant number of additional stores in fiscal 2025.” With the fiscal year set to end on January 31st, it appears the race is on, and according to a blog tracking closures, GameStop is planning on shuttering (or already has) over 430 stores this month.

As of Sunday, January 11th, the list of planned closures is at 435 stores across 42 states. As of February 2025, the company was operating 2,325 stores in the US, so that represents a significant reduction in its retail presence. And this comes as the company is largely winding down its international operations, having already left Canada, Germany, Austria, Ireland, Switzerland, and Italy, with plans to exit France within the next 12 months.

Dumb Money thinks you’re stupid — the title might as well be a reference to anyone paying to see the film.

It’s a bummer, too. I had such high hopes! The GameStop saga, which is the basis for the movie, is genuinely bizarre, and anyone with a flair for the absurd would have a fantastic time with it. To recap: a bunch of Redditors (and others) bought the stock of a flailing retailer that was heavily shorted, sending it soaring — and burning the shorts in the process.

GameStop has fired CEO Matt Furlong, the company announced as part of its first quarter 2023 earnings on Wednesday. There’s no immediate replacement, though board chairman Ryan Cohen has been appointed executive chairman, the company said in a short press release about Furlong’s firing.

Cohen, who founded the e-commerce site Chewy, has invested in a number of “meme stocks,” including GameStop and Bed Bath & Beyond. His surprise sale of Bed Bath & Beyond stock in 2022 raised eyebrows and led to at least one lawsuit accusing him of pumping and dumping the stock. His initial investment in GameStop back in early 2021 led to an enormous rise in the stock and contributed to its status as a memestock beloved by the Reddit sub r/wallstreetbets.

I was somewhat surprised that both Netflix and MSNBC chose to make documentaries about Wall Street Bets, GameStop, and retail traders. The majority of the action takes place online, after all. So what is the visual here? Watching someone type text into a box?

As a result, MSNBC’s feature, Diamond Hands: The Legend of WallStreetBets, and Netflix’s series, Eat the Rich: The GameStop Saga, rely heavily on stock footage. In the case of Diamond Hands, this has a ’90s MTV type of vibe; in the case of Eat the Rich, it seems like editors just slapped together whatever was handy and cheap.

In February, a quant fund called Cindicator Capital posted a job listing for someone with three years of trading experience — and at least 1,000 karma on r/WallStreetBets. “Important: NO higher education in economics or finance,” the listing said. Most of the time on the job would be spent on Reddit, Twitter, and Discord, finding out what retail traders are up to. Among the job duties listed: “opening six-figures OTM [out-of-the-money] options trades with the firm’s own capital” and “trying your best to prevent our risk management from having a heart attack.”

This listing actually made sense. After a few boring years where normal people mostly bought index funds, the pandemic sent a bunch of people who otherwise would have bet on sports into the welcoming arms of a new batch of mobile-first trading platforms because, well, there weren’t any sports to bet on. So retail traders bought into stocks — not with the idea of making a long-term investment, but rather with the idea of quick money. More sophisticated traders exploited market inefficiencies. Others just yoloed into the memes.

Walking up to a podium in San Francisco this summer, Kevin Paffrath grabs the microphone. “Hodl that AMC,” he says with a smile, gazing out at the few dozen or so people, predominantly young men, attending the rally, a reference to the “meme stock” moment from earlier this year.

Paffrath, better known as MeetKevin on YouTube, is running to unseat Gov. Gavin Newsom in California’s recall election this month. It’s rare that a gubernatorial candidate would lead off a speech with such a painfully online reference, but that’s part of Paffrath’s appeal. He’s branded himself as the candidate for the r/wallstreetbets crowd — and so far, it’s working. As of publication, he’s the top polling Democrat at 8 percent.

“Apes together strong” is one of the mottoes of Reddit’s r/WallStreetBets community. Now, members of the financial subreddit are making good on one of their favorite memes by donating hundreds of thousands of dollars to charities supporting gorillas in the wild.

The most prominent recipient of the redditors’ generosity is the Dian Fossey Gorilla Fund, whose president and CEO Tara Stoinski describes it as “the world’s largest and longest running organization that is fully dedicated to gorilla conservation.”

GameStop stock (GME) soared in value on Wednesday, peaking at $348.50 per share. Then, in an event that’s definitely not cause for concern, minutes later it lost fully half its value by plummeting to $172, Bloomberg reports. Yes, “stonks” are back, and GameStop is once again in the crosshairs of online amateur investors.

Wednesday’s drama ultimately ended with the price settling back down to $265 per share, but it’s hard to not feel déjà vu. It seems like it was only yesterday when everyone was watching in a mixture of shock, amusement, and general concern as GME crested $483 per share. The rise and fall doesn’t quite compare, but the losses for anyone who sold during Wednesday’s dip in price are likely huge.

A cybersecurity firm found that bots were promoting GameStop stock on social media before and after the stock’s frenzied rise last month, Reuters reported. Massachusetts-based PiiQ Media says social media bots promoted Dogecoin, GameStop, and other “meme” stocks in posts on Facebook, Twitter, Instagram, and YouTube. The firm estimated that tens of thousands of bots participated, but it’s still unclear how much influence they had or didn’t have on the rise and fall of GME and other stocks.

Shares in GME skyrocketed in January as Reddit users on r/wallstreetbets rallied around the stock in an attempt to squeeze hedge funds that had bet against the video game company. PiiQ told Reuters it detected “patterns of artificial behavior” in GameStop-related posts just before the January 28th chaos through February 18th.

GameStop is up... again, by a lot. Before market close on Wednesday, the video game retailer’s shares started to soar, and GME just closed at $91.71 — up nearly 104 percent for the day.

It’s the highest the stock has been since it fell back down to Earth at the beginning of the month following the unprecedented, Reddit-fueled rally that sent it as high as $483 a share. Over the course of the afternoon, trading on the stock was halted twice.

GameStop CFO Jim Bell has resigned, and will be leaving the video game retailer for good on March 26th. That’s just over a month from now. GameStop also announced a “succession plan,” just in case it can’t immediately find anyone suitable to accelerate a mall-based video game retailer’s transformation into the post-pandemic future. We can only speculate on the reasons for his departure, but let’s just come out and say what everyone is thinking: STONKS!

It’s not like he had a falling-out with the company: “Mr. Bell’s resignation was not because of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices, including accounting principles and practices,” writes GameStop in this SEC filing.

Weeks after Reddit community r/WallStreetBets shitposted GameStop stock up to more than $400 a share, the House Financial Services Committee pulled all of the major players in for questioning on Thursday.

The hearing featured:

“Roaring Kitty,” also known as u/DeepFuckingValue on Reddit and Keith Patrick Gill in real life, is now the target of a lawsuit (which you can view below) that claims he manipulated the market to increase GameStop’s stock price.

The lawsuit claims that he created a “fake persona” of an investment newbie, while actually having several financial certifications and working for an insurance company. That company, Massachusetts Mutual Life Insurance Company, is also named as a defendant, with the case saying that it should’ve prevented Gill from talking about the stock.

Reddit CEO Steve Huffman, Robinhood co-CEO Vlad Tenev, and Keith Gill (aka Roaring Kitty) are all on the witness list for an upcoming hearing before the House Financial Services Committee, according to a release from Chairwoman Maxine Waters (D-CA). The hearing, to be conducted virtually, will probe the recent volatility in shares of GameStop following a rally fueled by a group of day traders active on the r/WallStreetBets Reddit board.

Over a two-week period that began last month, GameStop’s stock (GME) skyrocketed by 500 percent, hitting a high of $483 on January 28th. Several government entities are now looking into whether there was market manipulation involved, and whether Robinhood and other brokerages that temporarily restricted trading of GME were in compliance with federal regulations.

Okay, screenwriters, directors, authors, and production companies — we get it. You have some experience telling stories about Wall Street, the video game industry, or social networks, and you see some mighty big dollar signs in the true tale of how Reddit managed to drive an ailing video game retailer’s stocks to completely ridiculous highs through sheer power of will plus a David versus Goliath narrative that probably doesn’t hold up under close examination.

So you’re making movies — five of them — and two shows. Why not? It’s not like any one person has the rights to a news event like this!

You could have been forgiven for missing Reddit’s Super Bowl ad tonight — it was only five seconds long. The ad mostly consisted of a text message that would’ve been pretty difficult to read in the moment, claiming that the company spent its “entire marketing budget on five seconds of airtime.”

“One thing we learned from our communities last week is that underdogs can accomplish anything when they come together around a common idea,” Reddit says by way of explanation, in a clear nod to the GameStop stocks saga that was driven by posters on the r/WallStreetBets subreddit. “Who knows, maybe you’ll be the reason finance textbooks have to add a chapter on ‘tendies.’”

Reddit’s r/WallStreetBets has grown significantly due to the community’s role in driving up the stock prices of companies like GameStop, AMC, and Nokia, and the whole saga has garnered so much attention that there are currently many movies and a TV show in the works. But that increased attention has also put strain on the r/WallStreetBets community itself, forcing Reddit to step in to help sort things out.

The trouble started Wednesday night, according to The New York Times, as some r/WallStreetBets moderators talked with each other about trying to get a movie deal. On Thursday morning, “the WallStreetBets moderators who were considering the film deal began booting out other moderators who had questioned them for secretly trying to profit from the forum’s success,” reports The New York Times. A highly upvoted r/WallStreetBets post called the situation “a coup,” saying the moderators the community “know and love” were being tossed out.

Robinhood has finally lifted all the restrictions on WallStreetBets-fueled stocks like GameStop and AMC, according to a report on Friday from Reuters. The company currently lists no limits on its support document entitled “Changes due to ongoing market volatility,” whereas last week, there were 50-plus companies included on the list.

Robinhood’s decision to restrict buying certain stocks caused a firestorm of controversy, leading to harsh condemnations from major public figures and politicians and the app being review-bombed on both Android and iOS. For its part, Robinhood said it wasn’t shutting trades down on a matter of principle or due to any shady deals with hedge funds, but because it simply didn’t have enough cash to meet its regulatory requirements.

When GameStop’s stock price fell by over 50 percent on Tuesday, closing at $90, we weren’t sure if it was going to pick back up or keep going down. It seems we now have our answer, as GME is down another 41 percent, closing today at just $53.50.

That’s less than the stock sold for the week before it took off on a wild rollercoaster ride induced by Reddit retail investors and an unprecedented social media frenzy. So it seems like we’re not so much in a dip, but on the long, slow ride back to the beginning.

It hasn’t been a good day for WallStreetBets, as GameStop’s stock has plummeted today. AMC, the community’s other bet, dropped as well. But unlike previous dips, the stocks don’t appear to be rallying. Prices stayed low for the entire trading day, something that hasn’t happened since WallStreetBets became a household name one week ago.

When the market closed today, the price of GameStop was $90 even, an 81 percent drop from GameStop’s peak at $483, and a 58 percent drop from its price of $218 on Friday evening. AMC is down too, closing today at $7.82, which is a 61 percent drop from its peak at $19.88.