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Meme Stocks and Retail Investor Coordination
In 2021, retail investors coordinated through social media to drive up stock prices of GameStop and AMC, demonstrating that organized retail participation could challenge institutional investors and short-sellers. This episode reconstructs the meme stock phenomenon, examining how retail investors used Reddit's WallStreetBets community to share investment theses and coordinate buying pressure. We analyze the mechanics of short squeezes—how short-sellers' need to buy back shares at rising prices creates feedback loops that amplify price increases—and how retail investors weaponized this…
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