"I Just Like the Stock": The Role of Reddit Sentiment in the GameStop Share Rally
25 Pages Posted: 30 Apr 2021 Last revised: 22 Sep 2022
Date Written: September 2022
This paper investigates the role played by the social media platform Reddit in the events around the GameStop(GME) share rally in early 2021. In particular, we analyse the impact of discussions on the r/WallStreetBets subreddit on the price dynamics of the American online retailer GameStop. We customise a sentiment analysis dictionary for Reddit platform users based on the VADER sentiment analysis package and perform textual analysis on 10.8 million comments. The analysis of the relationships between Reddit sentiments and 1-minute, 5-minute, 10-minute, and 30-minute GameStop returns contribute to the growing body of literature on 'meme stocks' and the impact of discussions on investment forums on intraday stock price movements.
Keywords: Gamestop, Reddit, Robinhood, media sentiments, meme stocks, herding, textual analysis, sentiment analysis
JEL Classification: D91, G41
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