【Retail Investors vs. Wall Street】Analysis of GME Online Discussions

Among the most eye-catching financial news of 2021, the incident where netizens on the Reddit forum banded together to fight against short-selling institutions by purchasing stocks undoubtedly stood out. One of the main stocks involved, GameStop (GME), surged from around $3 to $483 in just a few months.

This financial battle drew significant global attention, with many Hong Kong netizens also participating.

Using data from January to March 15 in Hong Kong, uMax Data conducted social listening and analysis, revealing that stock prices may not have a sustained impact on discussion volume but are correlated with the direction of discussions.

Comparing GME's discussion intensity and stock price trends from January to March, both peaked at the end of January, with discussion intensity dropping sharply alongside the stock price. However, unlike the stock price, discussion intensity did not rebound significantly in March.Additionally, the increase in January shows that discussions about GME in Hong Kong lagged behind, only becoming significantly higher at the stock's second peak, while attention similarly plummeted when the stock price sharply declined.

Stock price fluctuations: Discussing the importance of maintaining a calm mindset

In discussions about GME sentiment, many people frequently talk about "Strong Hold," which means holding firm. Netizens generally believe this action helps drive up the stock price, but some also argue that refusing to sell even when the price surges significantly is unwise.

The percentage trend analysis discussedfrom different perspectives shows that it can be divided into stable periods and volatile periods

We observed an inverse relationship between stock price volatility and discussion volatility. During the first stable period, the stock price dropped from its peak of 347 to 52; whereas in the volatile period, the price briefly plateaued, fluctuating between 40-50. In the second stable period, the stock price surged overnight—indicating that the more volatile the stock price became, the more stable the discussion content remained.

 

Securities firms are the most discussed topic, with trading restrictions drawing attention.

The GME incident was described by many as a battle between retail investors and short-selling institutions. However, online discussions revealed that the topic of "short-selling institutions" actually received the least attention among all subjects, while the most concern was directed toward "brokerage firms," indicating that the actual focus was on brokerages.

Among the key discussion points about brokerages, the issue with the highest volume and engagement was the "trading restrictions." On January 28, many brokerages restricted users from buying or selling GME stock. Netizens not only expressed dissatisfaction with the brokerages' actions but also debated which firms still allowed normal trading.

Additionally, basic brokerage services such as "account opening/deposits" and transaction fees also sparked lively discussions.

However, the revelation during the March hearing that some brokerages used "phantom shares" instead of actual trading received little attention.The GME incident demonstrates that netizens' opinions are no longer limited to PR and brand image issues but can also trigger concrete actions, causing substantial impact on businesses.

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uMax Data specializes in social and current affairs monitoring, with over a decade of expertise in Cantonese natural language processing technology and experience, catering to Hong Kong's unique online ecosystem. The platform is designed to be user-friendly, progressing from basic to advanced levels, with high flexibility, making it suitable for various corporate departments such as public relations, market research, and product development to grasp social trends. Want to analyze public opinion through online discussions? Understand what netizens are thinking? Email us at info@umaxdata.com now to request relevant case studies and insight reports. Meanwhile, the incident exposed during the March hearing, where securities firms used "shadow stocks" as substitutes for actual trading, received little attention.

The GME incident demonstrates that netizens' opinions are no longer limited to public relations and brand image issues but can also trigger tangible actions, causing substantial impacts on businesses.