The Role of Reddit in the GameStop Short Squeeze
16 Pages Posted: 24 Jun 2021 Last revised: 28 Dec 2021
Date Written: December 27, 2021
Adapting recent innovations in text analysis on microblogging platforms, we present evidence that the tone of discussions on the subredditt r/wallstreetbets (WSB) displayed significant predictive associations with intraday GameStop returns, volatility, bid-ask spreads as well as volumes. Most importantly, we show that the comment distribution on the subreddit obeyed a power law, and that it was a tiny minority of 462 most influential subredditors whose posts most impacted the GME stock returns and volatility.
Keywords: Short Squeeze, GameStop, WallStreetBets
JEL Classification: D91, G14, G40
Suggested Citation: Suggested Citation