![]() Online social media have revolutionized the way we interact with peers, share information and form opinions 1, 2, giving rise to new large-scale social phenomena: for instance, the spreading of fake news 3, 4, the formation of echo chambers and polarized opinions 5, 6, the organization of collective actions-from the Arab Spring 7 to climate change protests 8. ![]() Although the model cannot be validated with available data, it offers a possible and minimal interpretation for the increasingly important phenomenon of self-organized collective actions taking place on social networks. Analytical solutions and model simulations on interaction networks of Reddit users feature a phase transition from heterogeneous to homogeneous opinions as engagement grows, which we qualitatively compare to the sudden hike of GME stock price. ![]() Taking inspiration from these early warnings as well as evidence from previous literature, we introduce a model of opinion dynamics where user engagement can trigger a self-reinforcing mechanism leading to the emergence of consensus, which in this particular case is associated to the success of the short squeeze operation. In this work we characterise the structure and time evolution of Reddit conversation data, showing that the occurrence and sentiment of GME-related comments (representing how much users are engaged with GME) increased significantly much before the short squeeze actually took place. As such, it represents a paramount example of collective coordination action on social media, resulting in large-scale consensus formation and significant market impact. Only if the site were routinely used for such unlawful purposes and seemed to have no legitimate purpose would one be likely to say that the site was illegal, and even then it is a stretch.The short squeeze of GameStop (GME) shares in mid-January 2021 has been primarily orchestrated by retail investors of the Reddit r/wallstreetbets community. It would be the specific acts by specific people that would be illegal. There are other cases in which such posting of an alleged "opinion piece" might be criminal or an actionable tort.īut that would not make the site illegal. ![]() If the published text contains false statements of fact, known to the author to be false, or that the author knows have not been checked and might well be false, that is additional evidence of such fraud. However, a person with an interest in a stock or other security who publishes an opinion or statement intended to deceive people, with the further intent of profiting by the deception, may well have committed securities fraud. In the US generally anyone may express an opinion on the value or merits of an investment, indeed that is protected speech under the first amendment. That is going to depend greatly on the circumstances. Or, are the websites fully legal and are just "opinions" that others reading can construe in any way they want.Įdit Coincidentally, this article just came out: Recent examples being Hertz and Gamestop:Īre the websites, and the advice they "appear" to give, illegal? Is this market manipulation or could one be accused by posting on these websites as a "market manipulator"? This is not unique to WSB and also exists anywhere stocks are discussed publicly (twitter has many accounts touting investment ideas). Websites like r/wallstreetbets can cause herd investments in various stocks. This is not investment advice and is in no way to be construed as investment advice.
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