Professional IT Consultant and internet skeptic Jaime Rogozinski has been grabbing the headlines in recent weeks, as the founder of the infamous Reddit thread ‘/r/wallstreetbets’.
The thread was created in 2012, as a way to make some extra money on top of his main job. But the influence of this channel has only been felt recently, as millions of people have been investing in stocks promoted by the wallstreetbets community. One wonders where these hordes of followers came from and how they banded together to cause such a panic on Wall Street.
The channel had gently built a bigger following over the years. Then, 2020 hit and the pandemic saw large numbers of people seek out other ways to make money. The “YOLO” attitude towards trading, which made the whole thing feel more like gambling, was particularly appealing to the public and it appealed to followers so much that the thread grew to 1 million in March 2020. This number skyrocketed to 4 million amid the GameStop frenzy earlier this year and actually managed to exceed the population of New York City, with over 8.4 million followers.
This army of self-titled ‘degenerates’ was so involved that they created their own language to communicate using acronyms and unique slang. Here is a taste of the wallstreetbets culture and to give you some insight into what this Reddit world is all about.
As is to be expected, most of the terms are in jest and the meanings hold little value. Take for example one of the most common terms, which is derived from an antique meme of a man standing in front of numbers and a big orange arrow labelled “stonks”. While the full range of vocabulary used among traders is broad, we will highlight some of the most common and memed terms used among users.
Guh - when your account goes from a significant amount of funds to nothing in a matter of moments.
DD - Due Diligence, which is when you do your homework on the investment you want to make.
In Scrambles - when a user has made a poor decision and is voicing their regrets.
$ROPE - directly related to the previous post, what users buy when they have made one of those decisions they regret.
Diamond Hands - A common term among users, meaning that you never sell and are a brave trader. Implying your hands are literally made of diamonds.
Toilet Paper Hands - This refers to a weaker trader, one that sells at the first sign of a red tick (drop) on the market.
The general interaction between users is exactly what you’d expect. Mild insults, coupled with the use of exaggerations and sarcasm to make points are commonplace on wallstreetbets. That isn’t to say the users are unintelligent, it is just the nature of the beast. Certainly, a far cry from what Wall Street workers use - or is it? Either way, it is certainly all-encompassing and is a big part of why the community has grown over the years.
Another bizarre aspect of the community was the tribal way in which users would form gangs, otherwise known as “Gang Life.” Here is a brief look at some of the most common sub-groups you’d see within wallstreetbets.
Bear Gang - These guys will gloat when the stocks crash or go down.
Bull Gang - The opposite of the bear gang and generally more favoured than their counterpart.
Cash Gang - Cash Gang are people that enjoy revelling in other members of the thread making lots of money.
Late-night Gang - Anyone willing to sit on the thread in the early hours, posting and discussing potential trades or whatever is current at that time.
As well as this, there is a list of ‘x-gangs’, which are represented by trading in a particular commodity or with a specific company. For anyone that is well-acquainted with Reddit culture, newcomers or ‘noobies’ will suffer the wrath of more experienced members if they are off the pace and asking basic questions.
What is Robin Hood and what was his role?
Robinhood is simply a mobile app that allows users to carry out commission-free investing, giving users the tools they need to carry out the trades that were being suggested on wallstreetbets. While it wasn’t an app designed specifically to satisfy the community, it was pivotal in providing Reddit users with the ability to make trades swiftly and simply.
Wall Street had never paid attention to companies offering this kind of software - and why would they? Regular people hadn’t been interested in trading. But, wallstreetbets helped to propel a lot of stocks higher and this worried financial talking heads and those on Wall Street.
This led to unprecedented levels of interest from the media and further drove the popularity of wallstreetbets and the number of users on Robinhood soared. It’s difficult to know exactly what went on during that period, but things will become clearer in the coming months.
What’s next for wallstreetbets?
Well, Jaime Rogozinski is sitting pretty, getting global praise for his manipulation of the stock market and the ruining fund managers Melvin Capital after they bet against wallstreetbets. Moreover, he just sold his life story to a movie production company for a six-figure sum - not bad for a guy looking to make a bit of extra cash on the side.
Major news outlets are claiming this is the end of wallstreetbets. But, the forum is still very much alive and a recent post reads “If this was over, they wouldn’t be telling you it’s over. They wouldn’t care.”
The heart and spirit of the community remain, with numerous billboards popping up across the U.S. advertising trading insights and displaying the recognizable wallstreetbets avatar. We expect things to drop off at some point, but as long as users are believing and investing, the show will go on into 2021.