Reddit traders are turning memes into money

To the Moon! A Gamestop story


Reddit is a growing environment for aspiring traders and it seems that memes play a major role. (Photo via Business Insiders)

Collin Andrews, Staff Writer

“To the moon!” It’s an expression used to describe space travel in the past. But now we have seen an entirely new use of the phrase courtesy of multiple Reddit groups that decided to choose a fight with the world’s day traders and hedge funds around the world. These Reddit groups have certainly turned heads this year, namely with some very interesting stock growth.

The story goes back a few years as many personal investors have always felt the game of investing is a rich person’s game and it is really hard to make a lot of money without having a lot first. Honestly, making the stock market almost seemed rigged and set for people who are in higher groups of society. 

This divide created animosity among many younger personal traders who felt something needed to happen to create a level playing ground, and in an almost robin hood fashion try to hit the big-time investors where it matters. That is their wallets. 

The group that led the way was a Reddit forum called “WallstreetBets,” day traders on Twitter, and other onlookers that wanted to join in on the mayhem. They joined together to show the vulture-like hedge funds who aggressively short-sold the stock for Gamestop. Over the course of the fourth week in January, the stock went from around four dollars a stock to well over $300, collectively driving the stock price up over 1,700 percent on that Wednesday alone in January.

In an effort to help slow down and regulate the volatile stock trading during this volatile time, the following day trading services such as Robinhood put a trading pause on Gamestop, Nokia, AMC, BlackBerry, American Airlines and Bed Bath and Beyond. This angered millions of investors and onlookers alike. 

This surge made those who were betting against the stock to cover their losses by buying more stock and making prices jump even higher. The end result gave way to investors who jumped in on the trend to make well over six, seven, or even eight-figure profits off of the trend, jumping the Gamestop trading frenzy into something of a meme legend. 

The poor unfortunate souls that bet against the surge, namely large investment firms and hedge fund investors who were the entire reason for this historic stock craze, lost big time. Business Insider estimates that hedge funds lost over $3.3 billion over the gambit. This included companies like Melvin Capital, one of the Wall Street hedge funds that were targeted by Redditors, who were forced to take a $2.75 billion bailout from other funds and creditors.

How did this really happen though? Well for starters, as with all things in the world and seemingly more so with Millenials and Gen Z, is “for the meme.” It honestly is because they would prefer to lose a little bit of money to crowdsource and be a part of a movement like this to stick to large corporations, even as a meme-filled, tongue-in-cheek joke.   

When enough people band together like this and are fueled by tweets from notable figures like Elon Musk and Barstool Sports President Dave Portnoy, the push to “send it to the moon” was a realistic and energetic event likening it to a lightning strike. 

At the end of the week, everything leveled back out to somewhat stable prices, with stocks such as Gamestop having increased over to about $156 a stock, which is almost a 300% increase and was the sole reason that Gamestop restructured their board of directors and created a new business model, arguably saving the company. 

So while it is a whirlwind of a trading event, and nothing like it has ever been seen before, Redditor and “memers” alike will always be waiting in the wings for the future launch of a stock they jointly set their eyes on. Just be ready for the next one because there may be a little bit of money to be made out of the deal.