12 Best Reddit Stocks To Invest In

They realized that if they all acted together, they could sort of screw the shorts over and make a profit doing so. Reddit promotes itself as “the front page of the internet.” Part social media, part news aggregator, part discussion forum, the platform hosts a diverse set of communities ranging from r/worldnews to r/babyelephantgifs. Posts and comments are public, and those that receive the most positive votes, or “upvotes,” from other users are featured most prominently. You can enter your email below to get our FREE report. In the same report you can also find a detailed bonus biotech stock pick that we expect to return more than 50% within months. We initially share this idea in October 2018 and the stock already returned more than 150%.

There is some belief that WSB signals the arrival of a powerful new force as large numbers of retail investors find influence by acting in concert or following one another into a big trade. That may serve as a check or balance on other large forces, such as hedge funds, which are used to throwing their weight around without ordinary investors affecting a price. For the most part, investors follow the “buy low, sell high” format when it comes to stocks.

• The GameStop affair has also caused a lasting shift in the analysis conducted by institutions.
• This seems like the perfect company to be moving around in the market, especially with the types of stocks that we see being really popular with some retail investors right now.
• High growth companies and tech stocks are the first to see their stocks fall.
• The GameStop event triggered more research into the impact of sentiment on Reddit.
• Meanwhile, in old and unsurprising news, it’s also not healthy for an economy to be bound to the fate of a few, giant corporate monoliths.

As “the democratization and the demonetization of Wall Street” progresses, buying stocks based on fundamental characteristics such as cash flow, management and return on investment is taking a backseat, Edelman said. PeakMetrics can scan Reddit to provide critical business insights — our machine learning platform detects online influence campaigns at scale and respond back when necessary. For those seeking to monitor the next GameStop scenario, PeakMetrics can flag discussions going on on Reddit that can potentially lead to the type of coordinated action that sends the stock market in a new direction. Sentiment analysis involves collecting data and identifying patterns in the conversations of Reddit users (and other social media channels) — ideally, in real-time. Tools like PeakMetrics enable organizations to track millions of news sites and blogs, 5+ social platforms, podcasts, and TV/radio, automatically alerting you when your brand is mentioned. Discussion about GameStop had been ongoing on the Reddit channel r/WallStreetBets for awhile, but momentum started to gather when retail traders on the platform noticed how heavily shorted GameStop’s stock was.

ETFs with exposure to Reddit

The week’s most popular Wall Street Bets post — bragging about an alleged 992% return on GameStop options — received a cool $765 worth of awards, according to an online program that estimates the real-world value of Reddit points. The first few days of gains saw Wall Street Bets members cheer the rally and beg more to join in. Posts made it to r/popular, Wall Street Bets members gained online infamy, more casual investors were introduced to the trend, and a cycle began. During the GameStop-trade saga, several Wall Street Bets posts with tens of thousands of upvotes have graced the pseudo-hall-of-fame page.

• The chart below shows how fake news can directly impact the stock market by influencing market sentiment.
• In the same report you can also find a detailed bonus biotech stock pick that we expect to return more than 50% within months.
• While the looming shutdown is contributing to the recent market dip, it’s not the only driver.
• No penny stock discussions, including OTC, microcaps, pump & dumps, low vol pumps and SPACs.
• Its wide membership of 900,000 flaunts a very specific (sometimes profanity-laced) culture and uses terms like “degenerate” to refer to its members.

They get it from bank loans, private venture capitalists or the federal government. You can also buy shares of Reddit through platforms like Equitybee or Forge Global, which allow individuals to fund employee stock options, essentially giving them the ability to invest in privately held companies. In its last funding round in August 2021, Reddit raised $410 million at a valuation of more than $10 billion. Since then, however, the value of the company seems to have come down. In June 2023, Fidelity wrote down the valuation of its holdings in Reddit, indicating that it now believes the social media platform is worth only $5.5 billion.

Misinformation and disinformation on Reddit

Reddit’s structure and the democratic nature of users picking the most popular content differs wildly from Wall Street’s research reports and market analysis. Yet both generate trade ideas that proliferate across how to buy mina crypto market participants. And Wall Street Bets’ ability to turn free, user-produced research into hugely viral media has seemingly been underestimated. Sneering memes can pull in a few dollars’ worth of awards.

Some posts garner so many upvotes they are elevated to r/popular, the constantly updated subreddit that flaunts the day’s posts with the most interaction. Members have spent the past three weeks bidding up the video game retailer GameStop, and the results have been spectacular. Shares have skyrocketed more than 1,200% since Wall Street Bets first piled in January 11.

Does Reddit matter to ordinary investors?

So if GameStop is trading at $10 per share, you can pay a small sum, maybe $1 per share, to be able to purchase shares for $15 each until March 31. If it trades to $30, you buy the stock for $15 each and sell at the market price. If it rises, they have to repurchase the shares they borrowed and then sold for a higher price, which will make them lose money. History suggests that no stock can go up forever, and over time, stock prices generally reflect the expected future earnings of corporations. But long shots can go on for extended periods if the players have enough resources to risk.

The stock quadrupled in four months, and that attracted short-sellers. Tesla CEO Elon Musk, the world’s wealthiest person, who has also publicly battled short sellers, tweeted out Tuesday, “Gamestonk!” with a link to WSB. Gamestonk is a reference to GameStop and to “stonk,” internet slang for stock. This is where things get a little complicated and a bit more unclear. Shares in GameStop ticked up on Jan. 11 after it named three people to its board of directors as part of a deal with shareholders who had been agitating for change.

What happened to markets during previous shutdowns?

Prominent investor Michael Burry called the move “unnatural, insane and dangerous,” per CNET, and others have analogized the Redditors’ actions to a “Ponzi scheme.” If you follow even a modicum of newsy stock trends, you’ve probably heard that certain unlikely stocks have flourished, particularly during the past week. Get this delivered to your inbox, and more info about our products and services. In the cryptocurrency realm, part of the solution is education, Edelman said.

No Low Effort Posts

Countless users unfamiliar with Wall Street Bets have been exposed to its exuberance and high-risk, high-reward behavior, often through posts showing off multimillion-dollar gains on GameStop shares. The words were dry, as they often harmonic trading patterns are, but the summary signaled a dramatic negative shift in the Fed’s stance. All the major stock market indexes fell that day, with the Nasdaq dropping the most — over 3%. Really, the only bright spot in stocks has been energy.

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The simplest solution is a financial transactions tax ― a small fee attached to every financial bet. This tax will either discourage reckless stock betting and reduce the volume of what trade bonds online is a mostly economically wasteful activity, or generate a great deal of revenue that can be devoted to more useful activities. But what exactly is it that they are going to discover?

Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. It’s interesting because it’s run, by at the top of the various structures of companies that run IKEA. It’s this Netherlands-based foundation that has a lot of control by the family of the guy who started it. In terms of a company I would be interested in buying if it went public. I’m pretty sure this would never happen but one company, I thought of was IKEA. The company has been around since the ’50s, started out as a mail order catalog company and now it’s the world’s largest furniture retailer with hundreds of locations globally.

The S&P 500’s worst stock performer to date is Netflix, which is down 70%. It’s an incredible reversal for a company that saw it share price skyrocket during the pandemic, when the streaming service became a lifeline for the locked down. The second-worst performer is Etsy, the online marketplace for art and craft from artisans, which is down almost 65%.