Introduction
In 2021, it’s hard to believe that a nearly broken game retail store, GameStop, would see its stock prices rise even during a pandemic when people are trying not to go outside. It’s possibly even harder to believe that this huge spike in stock price will be driven almost entirely by a Reddit community called wallstreetbets. Starting from early 2019, some hedge funds in Wall Street don’t have confidence in GameStop’s performance since no one goes to a physical game store to buy games anymore. So some hedge funds had been shorting GameStop’s stock, betting that its stock was doomed to further decline. They never thought one day they would meet their match, a Reddit community. A group of amateur investors tends to teach Wall Street a lesson so they have been pushing GameStop’s stock the other way, buying tons of shares and stock options. GameStop’s stock price exploded over the next few days, as individual investors drove up the price enough for mighty hedge funds to abandon their positions and lose billions of dollars.
Inspiration
My inspiration came from the news I saw on Yahoo finance, How WallStreetBest pushed GameStop Shares to the Moon. The title caught my attention in a flash. After I finished reading the whole article. I was impressed by this Reddit sub-community can actually manipulate a stock and sent that stock soaring the market. I was surprised by the power of social media. After I researched more about the background, I was even more surprised by the butterfly effect which was brought by only one Reddit post. So I thought it would be interesting to create a timeline for this recent topical event in the financial industry.
I dived into the Reddit sub-community, ‘wallstreetbets’. Everything started from a post, “Rally the troops, my brothers, for the war could be over very soon,” a commenter who goes by Gardeeon wrote on Jan. 19. “You control the power, GME is not going to the moon, but to the edge of the [expletive] observable universe.”
It’s hard to believe that this such outright calls on social media for investors to coordinate their behavior struck many observers as skirting the line of market manipulation. More and more investors started to answer his call and rush to the stock trading platform to buy more and more GameStop shares. One day after the post on Reddit, I realized GameStop’s stock rose from $6 to $67 in one day. Then things went more wildly, two days later, it rose 57%. Then 27%. The next week, it rose another 18% and 93%.
A story like this, retail investors on Reddit are battling Wall Street hedge funds, is sufficient enough to be marked as a historical event in Economics history. By Wednesday, January 27, GameStop’stock had gained more than 700 % over the course of four trading days, while the savvy Redditors started targeting other heavily-shorted stocks. Along with GameStop, other heavily shorted stocks like AMC, Nokia and Blueberry rose more than 150% in a few days.
For perspective: One year ago, GameStop was $4 per share. In January 2021, it went up to $466 per share in only two weeks. All the rises of the stock are pushed by only a community on Reddit and retail investors got the Wall Street Capitalists beaten for the first time.
Methods
To visualize my findings, I used Timeline JS, an open-source tool created by KnightLab that enables anyone to build visually rich, interactive timelines. The platform provides a pre-made Google Spreadsheets template that has relatively low flexibility in terms of customization. Columns were fixed with necessary data columns and few select aesthetic adjustment options.
I utilized Google sheet to input and format data for each component of the timeline. In addition to adding data, images, and captions, Timeline JS allowed you to add videos to visualize the timeline better and help viewers understand the content.
I wanted to give viewers a broader perspective, not only about the event itself but also includes the cost and effect of the event. So I started with introducing the company, GameStop, and ended up with the consequence of this event — one of the most respectful hedge funds on Wall Street is nearly bankrupt. In the middle of the timeline, I added a news video of what professionals are saying about GameStop’s stock.
Results
One design choice I made was to add a video in the middle of the timeline as additional evidence. The video is about two experts discussing the situation and talking about their reflection from this battle between Wall Street and retail investors, also their prediction of how the stocks will behave in the future.
Another choice was I created events based on the rise of the stock price. Some events on Timeline are very close to each other, so it can visualize how wildly the stock price was going up in a matter of days.
Reflection
The final result of the timeline came out very clean and neat. The information was straightforward and accessible for any user to understand the series of events and controversy. It also helped me sort out my thoughts.
However, there are some major limitations to this project. My original idea is very limited to this Timeline JS function. I was planning to screenshot the stock price each day but I couldn’t upload my own image to the spreadsheet. So the only way for me was trying to find an image online but the resources online are very limited. For better telling the whole story, I added an explanatory video from professionals so that it would help viewers who are not familiar with the market to understand the timeline. For visual design, I feel like the caption of the image is too small to read. In the beginning, I barely noticed that there were captions for each image. Instead of adding a caption to the image, a hover effect would improve the readability of the caption.
References
How Reddit users sent GameStop stock soaring, upending the market
How WallStreetBets Pushed GameStop Shares to the Moon
‘Dumb Money’ Is on GameStop, and It’s Beating Wall Street at Its Own Game
Class-action lawsuit filed against Robinhood following outrage over GameStop stock restriction