In November and December 2020, following the October 8th surge, multiple /r/WallStreetBets users made posts hyping up GameStop stock, including due diligence posts predicting a possible short squeeze, leading to a those /r/WSB users who bought in the stock referring to themselves as GME Gang.
The number of posts about GameStop stock in /r/WallStreetBets increased in December 2020, with some users betting on an upcoming short squeeze in the stock (posts shown below), with hedge fund Melvin Capital, a major holder of GME short positions, being collectively chosen by the subreddit as an antagonistic figure.
First Short Squeeze Leg
On January 11th, 2021, Chewy founder Ryan Cohen joined the GameStop board of directors. This, along with hype about recently-released video game consoles like the PlayStation 5 and Xbox Series X sparked renewed interest in GameStop among investors, which had bottomed out at $3 a share in 2020 as many people thought the store would soon go bankrupt. The event served as a trigger for the initial leg of the short squeeze in the stock, with GME share price increasing from $19.95 on January 12th to $31.40 on January 13th to $39.91 on January 14th. During that period, multiple /r/WallStreetBets users made posts in which they prompted others to buy GameStop stock and options. On January 13th and 14th, DeepFuckingValue posted screenshots of their potential call earnings from their GME calls, with the January 13th post (shown below, left) gaining over 41,900 upvotes in ten days. On January 17th, Redditor TitusSupremus made a DD post hyping up further buying pressure in the stock that gained over 12,900 upvotes (shown below, right).
/r/WallStreetBets vs. Citron Research
Prior to January 2021 events, /r/WallStreetBets built antagonistic relationship towards Citron Research in 2020 as the majority of /r/WSB users disagreed with Citron’s bearish prognosis towards several stocks popular in the subreddit.
On January 19th, 2021, Andrew Left of investment newsletter Citron Research posted that he thought those investing in the company at the current level were “suckers,” announcing a live stream about the situation on January 20th. On the same day, Redditor SmollPpMaster69 posted the screenshot of the tweet to /r/WallStreetBets, writing “Shitron Attacking begins.” and gaining over 23,000 upvotes in two days. Also on the same day, Redditor spike142 made a post “Citron’s Biggest Mistake: They Announced that they would have a live stream, and provided the time and date.”
On the following day, Andrew Left’s stream was raided by /r/WallStreetBets users, with the stream experiencing technical difficulties. Multiple memes based on the stream and generally about Citron Research were posted in /r/WallStreetBets in the following days.
Second Short Squeeze Leg
On January 22nd, 2020, following the increasing buying pressure by /r/WallStreetBets users and other market players, the price of GME stock surged from $43 to $65, peaking at $76.35 during the day.
On January 25th, 2021, the price of the stock rose to $136.36 within two hours after the premarket opened, with the stock opening at $96 during the main trading session. Within one hour after opening, the price reached $158.
The January 2021 GameStop short squeeze and the role /r/WallStreetBets played in it attracted interest from both mainstream media and social media, with news articles and viral posts about the situation being made.
This content was originally published here.