Philosopher Slavoj Žižek says Wall Street Bets’ GameStop squeeze was revolutionary because of how it focused on deliberately creating chaos, rather than anything fundamental

Slavoj Zizek
  • Slavoj Žižek says the GameStop short squeeze was revolutionary because it didn’t focus on fundamentals.
  • Žižek is a political philosopher who holds positions at the University of Ljubljana and the University of London.
  • Žižek said he sees parallels between a recent presidential campaign slogan “corruption for everybody” and the GME saga.
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Slavoj Žižek joined Bloomberg’s “Odd Lots” podcast with Joe Weisenthal recently to discuss the r/wallstreetbets GameStop saga and his essay for the Spectator titled “Corruption for Everybody.”

Žižek, a researcher at the Department of Philosophy of the University of Ljubljana and the international director of the Birkbeck Institute at the University of London, is known for his cultural critiques and communist beliefs.

The Slovenian-born political philosopher has long been a staunch critic of capitalism, and in his latest interview, he once again hits at a central issue of the system: corruption.

Žižek normally doesn’t involve himself in stocks or the market, but the philosopher said the populist logic in the GameStop movement drew him in.

Žižek sees parallels between the GameStop short squeeze phenomenon and a Presidential campaign by the Croatian movie director Dario Jurican in 2019, wherein Jurican used the slogan “corruption for everybody.”

The philosopher says that the campaign promised normal people would get to profit from cronyism, and although voters knew it was a joke, there was significant support for the campaign.

Reddit’s r/wallstreetbets is a similar phenomenon, according to Žižek.

“We are in a situation in which Wall Street, the model of corrupt speculation and inside-trading, always by definition resisting state intervention and regulation, now opposes unfair competition and calls for state intervention,” Žižek wrote in “Corruption for Everybody.”

“In short, wallstreetbets is doing openly what Wall Street has been doing in secret for decades,” Žižek added.

In Žižek’s mind, the GameStop phenomenon was revolutionary because it focused on creating chaos in the markets and giving the power of “corrupt speculation” to the retail trader.

Reddit traders’ investments in GameStop weren’t based on anything fundamental, in Žižek’s view. Instead, the traders’ goal was to band together and bring about a “truly populist capitalism” with the power of “corruption” going to the people.

“The basic idea is, ‘we don’t care what really goes on at GameStop, or if they have a certain new product or whatever. We just want to show the market that success is not the reality of production but the enigmatic character of our act,'” Žižek said.

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GameStop short-seller Melvin Capital suffered a 49% loss in the 1st-quarter after being hit by the Reddit-fanned trading frenzy

Gabe Plotkin
Melvin Capital founder, Gabe Plotkin.

  • Gabe Plotkin’s Melvin Capital extended its first-quarter losses to 49%, Bloomberg reported, citing sources.
  • Melvin declined 53% in January, reversed some of that loss with a 22% gain in February, but slid 7% again in March.
  • Reddit traders hammered the hedge fund’s short positions against GameStop earlier this year.
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Melvin Capital, the hedge fund that dug itself into a hole during the GameStop saga, extended its first-quarter losses to 49%, according to a Bloomberg report.

The firm, founded by portfolio manager Gabe Plotkin, saw a 53% decline in January, reversed some of that loss by gaining 22% in February, but slid another 7% in March, Bloomberg said, citing sources.

Melvin was among a handful of short-sellers that got torched by the Wall Street Bets army that bid up GameStop’s shares, leading to massive losses for those that wagered bearish bets against the video-game retailer.

“51% to go,” a Wall Street Bets user posted on Reddit in response to Melvin’s first-quarter decline.

The fund closed its short position against GameStop on January 27. It started out this year with $12.5 billion in assets under management, but ended January with about $8 billion. Steve Cohen’s Point 72 and Ken Griffin’s Citadel injected a $2.75 billion investment in Melvin to support its battle against the Reddit army.

Plotkin racked up about $860 million through 2020 after his firm returned 53%, but January’s deep decline left him with an estimated personal loss of $460 million, Bloomberg reported.

Plotkin was grilled before a congressional panel in February, where he defended his short position and said it was never part of an effort to “artificially depress, or manipulate downward, the price of a stock.”

A spokesperson for Melvin didn’t immediately respond to Insider’s request for comment.

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Wall Street Bets traders are more skilled and responsible than they get credit for, a new academic study finds

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  • Traders who frequent Reddit’s WallStreetBets forum don’t get the credit they deserve when it comes to making investment decisions, according to a new research study.
  • The epic GameStop short-squeeze and subsequent congressional hearings catapulted Reddit’s WallStreetBets into the mainstream earlier this year.
  • “In sharp contrast to regulators’ concerns that WSB investment advice is harming retail traders, our findings suggest that both WSB posters and users are skilled,” the study concluded.
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Reddit’s WallStreetBets forum has garnered a reputation for being a meme-fueled casino where members push risky investment ideas and bet their life savings away, but real-world data suggests the users of the forum post serious due diligence reports and are actually quite skilled, according to a new research study.

“Despite the conventional view that the platform primarily attracts uninformed investors, we find no systematic evidence of this,” the research authors wrote.

Place Your Bets? The market consequences of investment advice on Reddit’s Wallstreetbets by researchers Daniel Bradley, Jan Hanousek, Russell Jame, and Zicheng Xiao found that the average buy recommendations posted to the forum delivered two-day returns of 1.1%, with a subsequent 2% return over the next month and 5% return over the next quarter.

Further, the buying activity in the stocks that are the subject of a WallStreetBets due diligence reports is usually driven by retail investors, with volumes increasing sharply in the intraday window following publication, the study found.

“We find that due diligence reports contain investment value,” the study said, adding that retail investors are able to discern the quality of the reports.

“In sharp contrast to regulators’ concerns that WSB investment advice is harming retail traders, our findings suggest that both WSB posters and users are skilled…[and] are likely to benefit from the recommendations on the site,” the paper concluded.

The researchers scraped all posts from WallStreetBets from 2018 to 2020, sorted for due diligence posts with clear buy or sell recommendations, and then manually reviewed the ticker symbols and associated recommendations.

The analysis does not include analysis of the explosion in posts the Reddit forum saw after its membership swelled to nearly 10 million amid the GameStop short-squeeze.

Read more: Goldman Sachs names 40 stocks to buy before they surge to meet its higher price targets – including 5 with more than 50% upside

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A Reddit-inspired bar in Tokyo caters to newbie investors where seasoned traders offer hot stock tips – and customers can try drinks like the ‘Margin Call’ and ‘Lehman Shock’

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  • An investing influencer has opened a bar that’s popular for stock-trading tips in Tokyo.
  • Many experienced traders visit, offering investment advice to those looking to grow their money.
  • It offers unique investing-themed drinks like the “Margin Call,” the “Lehman Shock,” and “Abenomics.”
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Tokyo now has a Reddit-inspired bar where seasoned traders provide newbie investors with trading tips, Bloomberg reported.

An investing influencer, who goes by the name Satoshi Uehara on Twitter, opened “Stock Pickers” in early March after a crowd-funding campaign raked in more than $50,000, or about six times the target.

The bar’s PR manager, Riki Yamauchi, told Bloomberg many novice investors visit the bar to meet Uehara and other experienced traders to gain an understanding of investing and stock valuations.

“People’s mentality is changing — you really have to think about how to structure your wealth,” Yamauchi, who is a financial professional himself, said. He said many youngsters have become more open to investing after Japan’s economy saw 30 years of near-stagnation.

Millions of retail investors accounted for a large part of stock-market activity during the pandemic, when people were stuck at home and began exploring easy-to-navigate online trading platforms.

At the bar, there are books on value investing and advice from legendary investor Warren Buffett. A model cannon used to symbolize the central bank’s asset-buying capacity can be found in one part of the bar, where a sign states: “Don’t fight the NIPPON GINKO (the Bank of Japan).”

Customers can also order investing-themed drinks, according to Bloomberg. The “Margin Call” – made with vodka, grenadine, and Campari – is said to have a biting taste meant to stir up bitter feelings traders may experience when summoned with the brokerage demand. The “Lehman Shock” is a punchy drink named after the investment bank at the centre of the global financial crisis. The “Abenomics” – made with cherry blossom syrup and grapefruit juice – is said to be less heavy than investors would hope.

“Stock Pickers” is not just popular among the newbie investors. It’s also had many visits from institutional investors. That may be because of Reddit and GameStop, according to Yamauchi. “People really care about what retail is thinking,” he said.

The bar opened when Tokyo was still in a state of COVID-19 emergency, but is able to function under shortened operating hours.

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Retail trading was said to be a risk to markets during the GameStop saga, but the Archegos blowup has Reddit users pointing fingers back at Wall Street

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  • The hedge fund Archegos triggered $20 billion of selling Friday after failing to meet margin calls.
  • The leveraged blowup has Reddit traders questioning who the real systemic risk is to the markets.
  • Wall Street Bets and the retail-trading boom were said to be dangers to markets in the GameStop saga.
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Retail traders on Reddit’s Wall Street Bets forum took a lot of heat during the recent GameStop saga for coordinating on the forum to pump the price of their favorite stocks.

After the hedge fund Archegos’ historic blowup at the end of last week on the back of leveraged stock bets, many on the platform are pointing fingers back at Wall Street.

In January, traders on Wall Street Bets began targeting stocks with high short-interest rates in hopes of driving a short squeeze and netting quick profits. The beleaguered video-game retailer GameStop became the group’s favorite target.

After GameStop’s share price soared, US regulators eyed whether the Reddit forum and its retail-trading members were part of market manipulation. The Securities and Exchange Commission and the Commodity Futures Trading Commission began reviewing traders’ actions on forums like Reddit to see whether illicit activity took place.

European Union regulators said that the Redditors’ actions “could constitute market manipulation” and that they would monitor the situation as well.

In an interview with CNBC on February 1, Democratic Rep. Stephen Lynch of Massachusetts even argued that Reddit-fueled trading could lead to “systemic risk” in the markets.

Now that the leveraged bets of Archegos have sent a handful of stocks crashing and caused reverberations throughout the markets, Reddit traders are questioning the way they were treated by regulators and the media compared with hedge funds.

A post that garnered over 14,000 upvotes in under five hours on Monday made the Redditors’ case: “Can we just appreciate for a moment that a large multi family private office leveraged themselves to the t–s, defaulted on a margin call, and it causing a market wide sell off to the tune of tens of billions of dollars, and yet I’m the irresponsible retail idiot who’s risky trading is dangerous.”

Archegos Capital is run by Bill Hwang, a former investor at the famous fund Tiger Management. Archegos’ inability to meet margin calls forced banks into block sales of $20 billion of stock held by the firm.

The sales created a sell-off in many big names, from Baidu to Discovery, on Friday.

Many Redditors and market commentators questioned why the banks would allow Archegos to leverage its bets to such an extent given Hwang’s history: He pleaded guilty to wire fraud in 2012 after his firm, Tiger Asia, traded on nonpublic information, reaping $16 million of illicit profits in 2008 and 2009, Bloomberg reported.

Bloomberg’s report said that Goldman Sachs had Hwang on its blacklist after he was charged, but “at some point in the past two-and-a-half years, the firm changed its mind about Hwang.”

That change of heart may have allowed Hwang to leverage his bets on equities. While it’s hard to say that the Archegos turmoil has created a systemic risk to the markets, it very well could moving forward.

“The Archegos drama involves a classic mix of massive leverage, concentrated positions, derivative overlays, forced deleveraging, and distressed sales,” Mohamed El-Erian, the president of Queen’s College and the chief economic advisor at Allianz, said in a LinkedIn post. “The pain has been felt so far only in a handful of stocks … What happens next depends on remaining sales and related contagion channels.”

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A Reddit forum founder who got banned from Wall Street Bets says the group is ‘tired’ of talking about GameStop – and that they really were behind the silver short-squeeze

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Ivan Bayoukhi, founder of WallStreetSilver.


Ivan Bayoukhi, the founder of subreddit Wall Street Silver, told Kitco News this week Wall Street Bets users are tired of talking about GameStop, and they did in fact trigger the silver short-squeeze in January, even though they said at the time this was not the case.

But the notorious subreddit had claimed they were not the ones behind silver’s rally as they were more focused on members buying into GameStop, AMC, and other heavily shorted stocks.

“The Silver Squeeze is a hedge-fund coordinated attack so they can keep fighting the $GME fight,” one user wrote last month.

Bayoukhi, who was among users calling for betting on silver, said one can just scroll back five to six months on the WSB forum to find several silver-related posts. Some posts would even mention the Hunt Brothers who managed to push silver prices from $6 an ounce to over $50 an ounce within a year more than three decades ago, he said.

“We’ve kept track of absolutely everything,” he said. “That’s in our extras section, or the information section on Wall Streets Silver reddit. We literally have a section for Wall Streets Bets posts for silver that they’ve deleted or kept up.”

But anyone attempting to post about silver on WSB, including Bayoukhi, was banned from the community because the majority of them didn’t want focus to stray from GameStop, he said. Still, at least 30 to 40% of the WSB forum loves silver, he said. This indicates there was conflicting opinion among members of the subreddit, with some wanting to continue the GameStop short-squeeze, while others wanted to expand it to silver.

“That’s why most of their users are coming to us for silver, because they’re tired of just talking about one stock all day.”

Shortly after Reddit day traders drove up the prices of GameStop earlier this year, silver prices rocketed to their highest since 2013, driven by messages urging Reddit day traders to buy the metal and hike its price. Some members of the community claimed to not be a part of it and banned posts that mentioned silver.

Bayoukhi compared silver to fiat currencies. When asked why he likes silver, he said traditional currencies aren’t backed by anything and 99% of them have failed historically. On the other hand, silver is used in everyday life, such as in solar panels or industrial goods, has affordability, and works as a real store of value and hedge against inflation, he said.

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GameStop has fallen nearly 50% from March intraday highs, but ‘diamond hands’ Reddit traders are still holding

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Day traders piled into GameStop stock in January, alerting Wall Street to the power of amateur investors

GameStop stock has fallen nearly 50% from March 10 intraday highs of $348.40, but that hasn’t stopped Reddit traders from holding the stock.

Traders on the popular r/wallstreetbets forum are doubling down their bets on the beleaguered video game retailer despite falling short interest and share prices.

GameStop stock was down as much as 20% on Tuesday before it mounted a recovery. Short interest in the stock has dropped to just 15.77% of its float as of March 16, according to data from Ihor Dusaniwsky of S3 Partners.

Even in face of the bearish news, Reddit traders continued to comment about their “diamond hands” on the GameStop thread of r/wallstreetbets for Tuesday, March 16, referring to investors who hold a stock or cryptocurrency regardless of potential risks, headwinds, or losses. The term is used to represent a group of retail traders’ collective strength in the markets if they act in unison.

A Reddit user going by the name u/darkspherei commented on the March 16 GameStop thread, “upvote if you ain’t selling 💎🙌🦍🚀,” and quickly received nearly 3,000 upvotes.

The online community is attempting to band together once again to “defend” GameStop.

Another commenter on the site going by u/_exordium argued the forum can create a repeat of February’s rise in prices if they band together.

“Don’t forget, in January once it tanked, we all quieted down for a while, but we never f—-‘ left and we never f—-‘ sold. When this place is overrun by FUD and shills, we wait…Hang the f— in there,” u_exordium said.

Despite the rallying cries, and the recent appointment of Chewy co-founder Ryan Cohen to lead a digital shift at the company, shares of GameStop traded down 10.79% as of 11:44 a.m. ET on Tuesday.

GME Chart 1
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GameStop rallies above $200 for the first time in a month as transition steps attract new bulls

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  • GameStop rose as much as 19% on Tuesday, climbing above $200 for the first time since February 1.
  • The retailer’s shares have rallied in recent days as its transition to e-commerce business picks up steam.
  • GameStop announced Monday that Chewy founder Ryan Cohen will head a committee tasked with leading the firm’s transformation.
  • Watch GameStop trade live here.

GameStop climbed for a fifth straight day on Tuesday, signaling investors bullish toward the company’s overhaul are sticking to their guns instead of playing the stock for quick profits.

Shares rose as much as 19% and landed above $200 for the first time since February 1. While the level remains well below the $483 peak seen during January’s trading frenzy, shares are still up more than 900% year-to-date and about five times higher than where they stood mid-February.

The upswing follows larger gains made Monday after the company announced board member and Chewy founder Ryan Cohen will head a planning committee meant to usher in GameStop’s transformation. Cohen said in a November letter that the video-game retailer needs to focus on e-commerce business and lean less on physical locations if it’s to survive.

Steps taken since suggest GameStop heeded Cohen’s warning. The company hired Amazon veteran Matt Francis to serve as its new chief technology officer in February. The transition committee is now tasked with hiring leaders for its e-commerce fulfillment and customer care arms, as well as find a new chief financial officer.

The group will also seek opportunities for transforming GameStop into a “technology business” and creating value for shareholders, the retailer said in a press release.

The announcement marks a new phase to the mania around GameStop stock. Shares famously shot higher in January as casual investors uniting online flooded the market with buy orders.

That phenomenon has mostly died out, but participating Reddit traders have replaced their calls of “GME to the moon!” with research into how GameStop can thrive as an e-commerce firm. The crude commentary, memes, and bragging about claimed windfalls remain.

Even Keith Gill, arguably the group’s most famous GameStop bull, has cheered on the latest rally. The investor, known online as RoaringKitty and DeepF***ingValue, posted an update to his position on Monday. The one-day rally allegedly fueled an $8.5 million profit, bringing his total gain to $25.8 million.

Gill gained notoriety online for his early bullishness toward GameStop. Fame gained during the January surge led to his testifying to the House Financial Services Committee on the matter last month.

GameStop closed at $194.50 on Monday. The company has two “buy” ratings, two “hold” ratings, and three “sell” ratings from analysts.

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Barstool Sports founder Dave Portnoy just released a video backing a new ETF designed to track Reddit-driven social-media buzz

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  • A new ETF designed to track social-media sentiment on platforms like Reddit and Twitter is launching on the New York Stock Exchange on Thursday under the ticker “BUZZ.”
  • Barstool Sports founder Dave Portnoy posted a video on Twitter promoting the ETF on Tuesday.
  • “There is a new ETF launching that I’m a part of, that I’m putting my reputation behind,” Portnoy said in the video.
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In a video posted to Twitter on Tuesday, Barstool Sports founder Dave Portnoy promoted a new exchange-traded-fund that is set to launch on the New York Stock Exchange this Thursday.

The VanEck Vectors Social Sentiment ETF tracks social media sentiment on various platforms like Reddit, StockTwits, and Twitter to fuel its holdings. The ETF will trade under the ticker symbol “BUZZ.”

“There is a new ETF launching that I’m a part of, that I’m putting my reputation behind,” Portnoy explained in the video. Portnoy added that he was “approached by these guys who built an algorithm” that “lingered” and “did its thing” for a number of years.

That algorithm is the BUZZ NextGen AI US Sentiment Leaders Index developed by Periscope Capital in 2015.

But after COVID-19, “the amount of chatter on the internet about stocks exploded,” Portnoy said, adding that he was approached after Penn National Gaming, a casino company that Portnoy partnered with to launch its online sports betting app, “showed up in their ranking.”  

The ETF utilizes alternative data about stocks scraped from social media posts, news articles, and blog posts that are then filtered through an analytical system that helps determines whether the sentiment in either positive or negative. From their, the top ranked 75 US stocks with a market capitalization of more than $5 billion are included in the ETF, which is rebalanced monthly.

“BUZZ empowers individual investors to potentially benefit from the predictive insights gained by measuring the collective convictions about stocks, ultimately building the benchmark for social sentiment,” VanEck managing director Ed Lopez said in a press release. 

In an emailed statement to Insider, VanEck added: “David Portnoy is a shareholder of BUZZ Holdings, ULC, the parent company of the BUZZ NextGen AI US Sentiment Leaders Index. He represents the Index and has no affiliation with VanEck. He does not provide investment advice on behalf of VanEck. There is no affiliation with VanEck and Barstool Sports.”

From criticizing Warren Buffett’s decision to sell airline stocks amid the pandemic, to his recent interview with Robinhood CEO Vlad Tenev, Portnoy continues to make waves in the investment world as he periodically broadcasts to his millions of followers the moves he is making in the stock market. 

A similar social media insight ETF from Sprott Asset Management that was based on a different social media sentiment index launched in 2016, but closed three years later after failing to attract enough assets.

The environment for a social media ETF may be better today than it was then, after millions of new investors flooded the stock market amid the COVID-19 pandemic, and following the outsized influence of forums like Reddit’s WallStreetBets, which helped sparked an epic short-squeeze in shares of GameStop earlier this year. 

Read more: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them – and the group has already nearly doubled over the past 3 months

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GameStop, AMC, and other Reddit favorites climb as day traders look to reignite momentum

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A customer laughs with a clerk as he purchases a copy of the video game “Grand Theft Auto IV” at a GameStop store in New York

  • GameStop, AMC, and other Reddit-favorite stocks gained on Monday as day traders aimed to spark rallies similar to those seen in January.
  • The group of previously unloved stocks has fluctuated in recent sessions as bullish momentum locks horns with profit-taking.
  • The day traders lack the element of surprise they enjoyed earlier in the year, and regulators are investigating whether Reddit posts fueling the previous surges constituted manipulation.
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GameStop, AMC Entertainment, and other so-called meme stocks gained on Monday as retail investors looked to fuel new rallies.

The video-game retailer rose as much as 10.1%. AMC climbed 13.7%. BlackBerry and Express swung 5.2% and 7.4% higher, respectively.

The stocks have traded with elevated volatility in recent sessions as day traders congregating online try to repeat the surges seen at the start of the year. Recent posts on r/wallstreetbets and other trading forums praising the upswing garnered thousands of comments and votes of approval. And while the companies trade well below their January highs, they still boast huge year-to-date gains.

The gains follow broad selling across the Reddit favorites. The stocks tumbled in Friday trading after rising the session prior, underscoring the back-and-forth action seen since January’s extraordinary rallies.

Retail investors looking to lift prices again face a tougher challenge. The Reddit-savvy traders had the element of surprise when they first bid up shares, and their ability to shock the market establishment quickly publicized the trade. The stocks’ unusually high short interest also exacerbated the rallies as bearish investors had to buy shares to cover their souring bets.

Those surges are old news now, and Wall Street has caught on to the Reddit traders’ antics. Hedge funds started tracking posts on relevant forums to monitor which stocks day traders could target next.

Separately, regulators are looking into the January price action to determine its legality. While the Reddit crowd has repeatedly indicated they simply “like the stock,” those warier of the sudden climbs suggest the online communication could qualify as market manipulation. 

A new report suggests bots also played a significant role in driving hype around the trade. Fake accounts on major social media platforms amplified calls to buy and hold shares of GameStop and other relevant stocks, Reuters reported, citing analysis by cybersecurity company PiiQ Media. Still, it’s unclear how much of an impact the bots had on the rallies.

Lawmakers have already taken steps to better understand the market phenomenon. The House Financial Services Committee held a hearing in February on the matter, and the Senate Banking Committee is poised to do so. 

GameStop closed at $101.74 per share on Friday, up about 428% year-to-date.

AMC closed at $8.01, up 270% year-to-date.

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