Redditors in the most popular options trading based subreddit have recently come together in an attempt to drive a mass short squeeze against the highly shorted GameStop (GME) stock.
The legality and ethics concerning the behavior of the community has also been questioned by leading financial figures, sparking serious debates of "stock manipulation."
As of right now (12:12 AM 1/28/2021 GMT), the r/wallstreetbets Discord server with hundreds of thousands of members has been deleted. The main subreddit has also been made private in a shocking turn of recent events.
Why was the WallStreetBets Discord server deleted?
To understand why this drama is going on, some backstory is needed. Many believe these actions are a direct result of what is going on with the speculative positions taken on GameStop (GME) stock by the options based subreddit community recently.
GameStop stock was at its peak and at least sold 142% short, mainly due to large positions taken by speculative wall street hedge funds.
What this means is that these hedge funds were making money when the price of GameStop stock fell. It should also be noted that these hedge funds stand to lose money with an increase in the price of GameStop stock.
Noticing this, the WallStreetBets subreddit quickly realized that the massive and rather careless short positions taken by mammoth hedge funds could be easily exploited to their advantage.
This has led to a massive increase in the value of GameStop stock over the past week, to the tune of 100 times. Ultimately, costing specific wall street hedge funds such as "Melvin Capital" billions of dollars.
Today, in a swing of events, Discord has terminated the WallStreetBets official Discord server. Discord has issued a statement regarding their decision, which reads:
This comes as a shock to many due to the fact the massive WallStreetBets subreddit was also set to private at roughly a similar time.
Currently, as of writing, the official r/wallstreetbets subreddit is also inaccessible, displaying a page that leads to this memo:
The message states that "WSB will be back," however, for many of its regulars, this has been an upsetting and uncertain turn of events to a community over 3 million members strong.
Many have taken to Twitter to voice their frustration and concern: