GameStop: Power to the Players?

Abstract

Having a look at the GameStop share very recently raises the question of how such a phenomenon of enormous price explosion can arise. Technological and financial innovations such as the internet and commission-free trading platforms entail the emergence of new phenomena that were previously unknown and unimaginable. Since dueling narratives surrounded the stock’s future opportunities which are reflected in investor expectations, one community, in particular, stands out as the traditionally uncoordinated and retail investor-driven side. In this context, the subreddit wallstreetbets became very prominent recently, as it is clear that many investors have coordinated their activities there. This short paper argues in a case-based research manner that a novel configuration of driving influence factors has led to this novel phenomenon which reveals that private investors can now participate in trading activities which were previously reserved for professional investors.