What is wallstreetbets Reddit?
This article first appeared in the Metal Toad newsletter. Subscribe to our weekly newsletter here to stay up-to-date on the latest cloud insights for the Media & Entertainment industry from Metal Toad.
It's likely been impossible for you to miss all the talk about GameStop stock. As of now, GameStop stock (GME) is at $110.99. That's down from a high of $347.51 but up 430% from where it started the year at $17.25.
What the heck is going on?
This upside is due to a corner of the internet called Reddit. More specifically, a corner of Reddit called r/wallstreetbets.
r/wallstreetbets is a group of investors (some professional, some amateur) who get together to share insights and talk about stocks. What makes r/wallstreetbets so interesting and influential is that it happens to be a group of 2 million people — or at least it used to be. After the publicity from the Gamestop stock boom, the membership has ballooned to 9.2 million people. Please let that sink in: that's equivalent to 1 in 4 of all residents of California or 2.2x the number of all the people who live in Oregon.
Then there is Reddit. As I mentioned, r/wallstreetbets is just one corner of Reddit, a "website" that has over 430 million users. That's well north of the total number of people that live in the United States (~330 million) or about 5.5% of the entire world population.
The biggest website you've never heard of
Reddit bills itself as the "front page of the internet," but we should probably know a little bit more about something that's having this much impact on the world around us.
- Reddit is not one website, it's 2.2 million
- Some subreddits are really big
- It's anonymous
- Someone you know is on Reddit
- Redditors are online
1. Reddit is not one website, it's 2.2 million
While all the content is on reddit.com, the website is made up of 2.2 million "subreddits". Each subreddit is a forum on a particular topic (like wall street trades...). Not all of these subreddits are active: only 130,000 are considered active.
2. Some subreddits are really big
9.2 million users may seem like a lot, but r/wallstreetbets isn't even in the top 31 of subreddits¹. The biggest one (r/announcements) has over 90 million members. Other top subreddits include:
2) r/funny (35.5m)
3) r/AskReddit (31.5m)
4) r/gaming (29.4)
5) r/awww (28.1m)
A snapshot of what was trending in the r/aww subreddit: "auto-leveling meerkat"
3. It's anonymous
Unlike Facebook, Reddit is anonymous and takes its anonymity very seriously. This is old school internet privacy. Reddit was founded in 2005, just a year after Facebook launched, and while Facebook veered away from established privacy norms, Reddit keeps them in place.
4. Someone you know is on Reddit
There's a great unofficial survey of members² that resulted in the following profile of an average Redditor:
- 71% under the age of 25
- 63% male
- 82% white (vs. 60% of US population)
- 59% single
- 58% students
There's also a heavy bias toward tech users. Not surprisingly, their CEO (Steve Huffman) is a 37-year-old white tech guy. And while that is the profile, it's worth noting there are lots of people who don't fit (145+ million women, for example).
5. Redditors are online
Subreddits are not just about millions of members. Redditors (members of Reddit) are online all the time. When I wrote this, 36,400 people were online in the r/aww subreddit seeing the same video of a meerkat that I shared with you. This means that things can (and do) take off very fast.
The Reddit Effect
I would predict that the r/wallstreetbets move with GameStop won't be the last time Reddit shakes things up, especially in today's increasingly digital world. Reddit has long been known by digital advertisers as a place for referral traffic, and whether you see Reddit as a place where we tap into the "wisdom of crowds" or "mob madness," we will be seeing it in the news again.
Note: This article first appeared in the weekly Metal Toad newsletter. If you find this article helpful and think someone in your life would benefit from it, please consider forwarding it to them and asking them to sign up to receive it themselves.