WallStreetBets briefly darkens after fueling GameStop’s rise to power

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(Bloomberg) – WallStreetBets, the internet forum fueling a retail frenzy, briefly turned off to new users on Wednesday after a deluge of new attendees raised concerns about its ability to moderate content, according to a notice on the website.

The WallStreetBets homepage went dark for all users for just over an hour on Wednesday night in New York City. A message on the site shortly after 6.30 p.m. in New York, said it was experiencing technical difficulties due to an influx of new members, rendering moderators “unable to guarantee Reddit’s content policy.”

An hour later, the forum appeared to return to business as usual, with moderators pinning a post saying its rapid growth made monitoring difficult. The site had racked up over 3 million members as day traders connected businesses from GameStop Corp (NYSE :). to AMC Entertainment (NYSE 🙂 Holdings Inc., which sparked mass rallies that burned down the hedge funds that had sold the stocks short.

The reaction to the brief disruption was swift and painful in the site’s preferred stocks. GameStop, multiplied by five in three days, fell 37% before making up for the loss. AMC, which doubled in Wednesday’s cash session, sank more than 50% at one point before cutting it in half. Nokia (NYSE :), the mobile phone giant which added 38% of its regular trading, gave up more than a third of that amount before recovering to trade lower by 6%.

The larger stock gauges did not appear to be disturbed by the commotion. Futures in the market remained about 0.4% lower, weighed down by poor performance from Tesla (NASDAQ 🙂 Inc. and poor results from Apple Inc (NASDAQ :). and Facebook Inc (NASDAQ :).

The day-trading phenomenon landed in Washington on Wednesday, when the White House press secretary said US Treasury Secretary Janet Yellen and the Biden administration’s economics team were monitoring stock market activity around GameStop. and other heavily short-circuited companies. Federal Reserve Chairman Jerome Powell dodged questions on the subject during his regular political press conference.

Senator Elizabeth Warren spoke up, saying she intended to make sure securities regulators “wake up and do their job.” Soon after, the Securities and Exchange Commission said it was “actively monitoring” volatility in the options and equity markets.

Before the subreddit was made private, there were 3.5 million r / wallstreetbets members, according to the site. That’s nearly 1.5 million more users than just a week ago, according to Breakout Point, a data and analytics company.

New subscribers began flooding message boards on Reddit almost immediately. A forum called WallStreetBetsNew, which was founded last year, has reached nearly 200,000 users, up from around 71,000 earlier today.

© 2021 Bloomberg L.P.

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