The GameStop trading frenzy quickly captured the world’s attention, and theories abound as to what exactly led to this moment. But it’s still not clear how the Reddit Revolution is going to end.
"The whole thing started because somebody disagreed with the sell-side research and 'prevailing wisdom,'" said Mark Abssy, head of indexing at Tematica Research.
Days after the short squeeze took off, the founder of Citron Research announced his firm would stop publishing research on companies it believes are overvalued. In the same way you can make money when a stock goes up, you can profit when a stock goes down — also known as short selling.
"The Citron narrative is going to change and have a pivot," said Citron founder Andrew Left.
Without access to research like that, Keith Gill — the Reddit user responsible for the GameStop craze — may not have ever established his bullish position. So this could pose a challenge to retail investors, who don’t possess the same sophisticated tools that professional investors do.
"I do worry that the loss of that kind of information of those perspectives is not good for the market," said Lenore Hawkins, chief macro strategist at Tematica Research.
The House Financial Services Committee has scheduled a hearing to address "recent market volatility" for February 18, after lawmakers on both sides expressed their concern. And the Securities and Exchange Commission, responsible for regulating the stock market, is watching. But all of that might not lead to any changes.
"For all we know, somebody was sincerely on the chat board saying, 'I really believe in the sanctity of BlackBerry going forward,' even though nobody uses a BlackBerry anymore. But you can't prove intent one way or another," said Danielle DiMartino Booth, CEO of Quill Intelligence and former advisor at the Dallas Fed.
GameStop’s stock has taken a downturn from last Monday, falling nearly 60 percent midweek. The same is true for others, like AMC and Bed Bath & Beyond.
But all eyes are still on the now famous Wall Street Beds Reddit thread — now boasting over 8 million subscribers — and what it could mean for the markets in the future.