Reddit’s influence on stocks is culture war of Wall Street versus everybody else, CEO says

The forum’s unprecedented impact on GameStop’s stock shows that markets must adapt to a new order

Steve Huffman, chief executive and co-founder of Reddit. Bloomberg

Reddit chief executive Steve Huffman said that the WallStreetBets forum is “by no means perfect but they have been well in the bounds of our content policy”.

“With all of our communities that do their best to be good citizens of Reddit, we try to do our best by them as well,” Mr Huffman said on the Clubhouse app. He called the forum’s outsize influence on GameStop stock a “culture war of Wall Street versus everybody else”.

He said anyone who thinks the users of the forum are “idiots” should spend more time reading the discussions.

“It’s this idiot swagger that masks what I think is this charming intelligence,” Mr Huffman said.

The forum’s unprecedented influence on GameStop’s stock shows that markets must adapt to a world where retail investors are gaining some of the power big financial firms have long held, according to Alexis Ohanian, co-founder of the online forum.

“This is something, I think, for a lot of people, that was a statement as much as an investment,” Mr Ohanian, who left Reddit’s board last year, said on Bloomberg Television on Thursday.

“I’d equate it to, like, folks voting with their dollars in order to get back at or make a statement towards big finance.”

Robinhood Markets and other online brokerages curbed trading in GameStop and AMC Entertainment Holdings on Thursday after users in Reddit’s WallStreetBets forum appeared to send the stocks surging.

Mr Ohanian called the move by Robinhood “pretty shocking” and “like the very thing all of these people are railing against”. He called the ensuing criticism of Robinhood “a very justified outrage”.

Robinhood subsequently said it plans to allow limited buying of certain securities that it had blocked from Friday.

Asked about the risk that internet forums can pose as a source of potential financial misinformation or market hype, Mr Ohanian punted, saying the same question exists around political issues. “This is a question for the decade,” he said.