The Role of Reddit in the GameStop Short Squeeze

Economics Letters

Adapting recent innovations in text analysis on microblogging platforms, the authors 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, they 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.