The rise of ‘meme stocks’ highlights the need to treat social media with caution
Investment advice on Reddit is “probably among the best”, according to the social media platform’s chief executive, Steve Huffman. This was one of the lesser-covered baffling statements to come out of last Thursday’s chaotic hearing where protagonists of the GameStop (US:GME) saga testified to US Congress. I hope the 9m members – or ‘degenerates’ as they like to call themselves – of Reddit’s r/wallstreetbets page don’t agree with him.
For the uninitiated, r/wallstreetbets is an investment forum where people discuss stocks and options trading. It’s notorious for favouring aggressive trading strategies that most people would consider gambling. It also played a lead role in stoking enthusiasm for struggling retailer GameStop, which at one point last month saw its shares rise 2,700 per cent from the beginning of the year.