Traders Who Launched GameStop Frenzy Are Turning Against New Members

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Longtime members of the Reddit forum that was the launchpad for the GameStop GME -59.85% frenzy are lashing out at the group’s millions of new users, asking whether they can be trusted and accusing them of working for hedge funds.

WallStreetBets has been hit by bots that question some of the members’ investing initiatives and pitch commission-free brokerage accounts, according to a Wall Street Journal analysis of the posts. Messages that promote stocks that don’t have large short positions—where traders sell borrowed securities betting the price will be lower when they buy it back—are blasted by members as being controlled by moneyed interests to sap momentum from the GameStop bet.

Longtime followers have reacted to the deluge of new content by asking moderators to ban new users or take additional steps to limit where they appear. “Seriously, the 6 million new users have f— this place up,” one user wrote Monday. “New users are coming here to screw us,” a post last Wednesday read.

Longtime members say the site, while always boisterous, now has more of a mob mentality. At least 180 posts submitted in January discussed new users or threads along with variations of the word “ban” and other terms describing account restrictions, up from 14 in December, according to the Journal’s analysis.

Last Thursday, when silver became a trending term on the forum and some members claimed it would be the next GameStop, others called the effort a misinformation campaign pushed by hedge funds and promoted by the media. On Monday, futures prices of the metal hit their highest level in eight years.

Prices of GameStop and silver both tumbled on Tuesday, and dozens of posts submitted in the past 24 hours blamed bots for spreading a concerted message to sell.

The success of WallStreetBets has also changed the forum from a place that covered a range of investing ideas to one with a near-singular focus on one company. Some of the most popular discussions in January 2020 centered on Donald Trump, John Deere and Virgin Galactic, according to the Journal’s analysis. In July, companies announcing Covid-19 vaccine trial results and electric-vehicle makers were among the most popular topics. By the end of last month, discussions on GameStop and a handful of other stocks dominated the most-popular posts.

Mentions of GamesStop’s ticker symbol overran the forum jumping from 43,600 mentions in December to at least 193,000 last month, the most of any ticker mentioned by far, according to data from TopStonks.com. The popular topics on the board almost exclusively revolved around GameStop and a handful of other picks that were heavily shorted by hedge funds.

Some of the posts are seemingly submitted by bots because they are posted in rapid succession containing the same text. One such post, “cant the hedge funds just drive the price down further like today and then cover their short position at a lower cost? and then no short squeeze?”, appeared dozens of times. The Journal identified at least 65 submissions posted since Wednesday that contain the same text, including five advertising a commission-free brokerage startup.

“The entire financial industry is now wide awake at the power reddit has to move the markets and as a consequence heavy investment is coming in learning and manipulating it to the advantage of anyone with enough spending power,” one Redditor wrote Sunday.

Wall Street is in an uproar over GameStop shares after members of Reddit’s popular WallStreetBets forum encouraged bets on the videogame retailer. WSJ explains how options trading is driving the action and what’s at stake.

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Write to Shane Shifflett at Shane.Shifflett@wsj.com

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