"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; Jiangxi University of Finance and Economics; Abu Dhabi University - College of Business Administration; Ho Chi Minh City University of Economics 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

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

Suwan(Cheng) Long

Judge Business School, University of Cambridge ( email )

Judge Business School, University of Cambridge
Trumpington St, Cambridge
Cambridge, CB2 1AG
United Kingdom

Trinity Business School, Trinity College Dublin ( email )

College Green, Dublin 2
Trinity College Dublin, the University of Dublin
Dublin, D02 PN40
Ireland

Brian M. Lucey (Contact Author)

Trinity Business School, Trinity College Dublin ( email )

The Sutherland Centre, Level 6, Arts Building
Dublin 2
Ireland
+353 1 608 1552 (Phone)
+353 1 679 9503 (Fax)

Jiangxi University of Finance and Economics ( email )

South Lushan Road
Nanchang, Jiangxi 330013
China

Abu Dhabi University - College of Business Administration ( email )

PO Box 59911
Abu Dhabi, Abu Dhabi 59911
United Arab Emirates

Ho Chi Minh City University of Economics and Finance ( email )

59C Nguyen Dình Chieu
6th Ward, District 3
Ho Chi Minh City, Ho Chi Minh 70000
Vietnam

Larisa Yarovaya

University of Southampton - Southampton Business School ( email )

Highfield
University Road
Southampton, SO17 1BJ
United Kingdom

Ying Xie

Cranfield University ( email )

Cranfield
Bedfordshire MK43 OAL, MK43 0AL
United Kingdom

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