"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

See all articles by Suwan(Cheng) Long

Suwan(Cheng) Long

Judge Business School, University of Cambridge; Trinity Business School, Trinity College Dublin

Brian M. Lucey

Trinity Business School, Trinity College Dublin; Abu Dhabi University - College of Business Administration; Shanghai Lixin Univeristy of Accounting and Finance

Larisa Yarovaya

University of Southampton - Southampton Business School

Ying Xie

Cranfield University

Date Written: September 2022

Abstract

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

Suggested Citation: Suggested Citation

Long, Suwan(Cheng) and Lucey, Brian M. and Yarovaya, Larisa and Xie, Ying, "I Just Like the Stock": The Role of Reddit Sentiment in the GameStop Share Rally (September 2022). Available at SSRN: https://ssrn.com/abstract=3822315 or http://dx.doi.org/10.2139/ssrn.3822315