How WallStreetBets Reshaped Retail Investing and Wall Street Strategy

WallStreetBets and the Rise of Social Investing

The 2021 GameStop (GME) short squeeze demonstrated in huge fashion the sheer market power of retail investors acting in methodical coordination. The precipitous rise of the stock over the course of weeks not only precipitated significant losses for multiple hedge funds, but also inspired many new and young retail investors to enter the stock market for the first time in a new world of social investing.

What was once a largely unknown subreddit called r/WallStreetBets (WSB) now lies at the center of the world for social investing. WSB provided the social media platform allowing the events of 2021 to unfold as a forum for retail investors to discuss their ideas and organize their actions in concert. While the subreddit had fewer than 2,000 subscribers during its humble beginnings in 2013, by 2019 that number had grown to 700,000 and over 10 million by early 2021 at the time of the first famous squeeze.

WSB was more than just a place where retail investors could discuss GME. Multiple stocks and strategies have garnered attention and made it to the mainstream retail investor community through the platform. Given the fallout for institutional investors in 2021, big firms acknowledged then that they could not ignore discussions on WSB and other social media platforms like X. Whether a stock is at risk of “meme-ing” is a new critical consideration for institutional investment strategy and portfolio design.

The rise of WSB didn’t just create meme stocks though, it permanently changed how markets work, forcing Wall Street to treat retail investors, online sentiment, and options-driven trading as real sources of price discovery and risk.

What is r/WallStreetBets?

WSB started back in 2012, founded by a consultant named Jamie Rogozinski as a place where community members on Reddit could discuss their stock trades, wins, and losses.

While for several years participation on the subreddit remained limited, once commission-free trading platforms like Robinhood began gaining traction among retail investors, the forum grew exponentially. For instance, Robinhood’s number of funded accounts went from 500,000 in 2015 to 10 million in 2019, and WSB subscribers ballooned to 700,000 in that same period.

By then, much of the culture and lingo that defines social investing today had already taken hold. Some terms and mantras that repeatedly pop up include:

• Diamond Hands – captures the idea of holding positions even through volatility as a commitment to risk tolerance.
• Paper Hands – the opposite of Diamond Hands, selling as soon as you sense trouble.
• YOLO – like the meaning beyond the subreddit, betting big on a single trade, usually defined as at least a $10,000 position in options or $25,000 in shares.
• Tendies – profits, related to chicken tenders.
• Stonks – stocks, ironically modified to indicate playing outside the rules.
• To the moon / mooning – the idea that the price will appreciate massively, usually emphasized with rocket emojis.
• Apes together strong – a phrase emphasizing retail power against that of institutional investors.

Outside of basic terminology, WSB is dominated by tropes and other lore that have continuing relevance. For example, posters often share stories of their big gains and big losses, with other members commiserating in both instances. Outside of generally relating on experiences in the market, WSB users especially bond over fierce opposition to Wall Street. An anti-institutional mindset permeates WSB and has driven multiple run-ups of names heavily shorted by asset managers.

Other perennial stories on WSB often get rehashed and are frequently re-memed by community members. One incident often mentioned is that of the “Intel Grandma.” In a post from 2024, a Redditor invested $700,000 of his grandmother’s $800,000 inheritance into Intel (INTC) stock. Shortly after, Intel announced it was suspending its dividend and the stock cratered 30% overnight. In a matter of hours, the original poster lost $215,000 of his grandmother’s inheritance. While at the time this event became the subject of endless memeing on WSB, as of May 2026 INTC has returned over 225% from the August 2024 dip, meaning the subscriber’s net worth could be over $2 million.

The Trajectory of Meme “Stonks”

Back in late 2020 and early 2021, GME was one of the first stocks to bring WSB from a mostly unheard-of subreddit to the mainstream. Originally discussed as a value play, GME’s later surge as a meme stock was fueled by a David-versus-Goliath narrative, especially after firms like Citron Research called buyers of GME “suckers” in a tweet at the end of January 2021. Retail investors from WSB poured into the stock, and GME’s meme status was recognized both in the media and by figures like Elon Musk, who memorably posted “Gamestonk!!” on his own Twitter account a few days later. The short squeeze that followed accelerated GME to an intraday peak of $483 on January 28 and has been an event memorialized both in film and in the minds of retail and institutional investors since.

From that event emerged one of the most famous stories about an investor who hit it big with the support of WSB. Keith Gill, whose story became the subject of the 2023 film *Dumb Money*, invested $53,000 in GME back in 2019, amounting to about 50,000 shares and 500 call options. During the short squeeze, the value of his position peaked at nearly $48 million. However, even as recently as June 2024, Gill went live on YouTube showing that he then held 5 million shares of GME along with 12 million shares in options that put his net worth well over $289 million.

But GME was not the only stock to have memed, nor the only stock to have gained significant attention from the WSB community. Coinciding with the short squeeze and rise of GME, AMC Theaters (AMC) also captured the attention of WSB users and rose 1,260% by year-end 2021. Similar feelings of nostalgia and opposition to Wall Street short sellers drove the run-up again, although in less spectacular fashion than GME. Other notable stock picks that experienced meme-like surges include Bed Bath & Beyond (BBBY), Wendy’s (WEN), BlackBerry (BB), and Carvana (CVNA), mostly driven by subscribers and retail investors piling into these stocks for nostalgic, emotional, or entertaining reasons.

More recently, other beaten-down names have obtained meme stock status, with some long-singled-out shares delivering outstanding returns. In July 2025, “D.O.R.K.” stocks — Krispy Kreme (DNUT), Opendoor (OPEN), Rocket Companies (RKT), and Kohl’s Corporation (KSS) — soared. Outside of these heavily shorted names, some longer-term bets made by users on WSB have proven worthwhile, Palantir Technologies (PLTR) being a notable example.

PLTR opened at $10 back in September 2020 and already then was heavily discussed on WSB. Users at the time liked its association with Peter Thiel as well as the idea of a futuristic government-related company involved in AI-like data analysis. While an anticipated rapid rise in the stock did not immediately come to fruition, the thesis about the importance of data integration and AI-driven decision-making proved mostly accurate, and today PLTR has a real moat in its embeddedness in government data operations. The total return on the stock has been over 1,400% since its IPO.

What meme stocks and WSB have taught us is that valuations are more than just what someone may find digging through financial statements. In a 2024 interview, Matt Levine, a columnist from Bloomberg, explained that increasing participation of entertainment-seeking retail investors risks shifting the value of stocks away from just the present value of their future cash flows and toward simply what someone is willing to pay. With a community of millions of retail investors on WSB “YOLO’ing” a single name, the price of that stock often fluctuates unpredictably. Just like Polymarket, Kalshi, or DraftKings, the stock market has emerged from the pandemic as a platform for thrill seekers to find entertainment in riding these highs and lows.

How did Wall Street respond to WallStreetBets?

Even before the 2021 GME short squeeze, large Wall Street banks tracked daily retail investor flows, if only for internal purposes. However, after the short squeeze, a whole range of products for institutional investors became more widely available and marketable.

What GME and the meme status of other stocks signaled to institutional investors was that retail flows weren’t just an interesting metric to follow — they could provide trading signals and were a material consideration as a risk management input. Prior to 2020, retail order flow rarely exceeded 10% of daily U.S. equity volume; today the average percent of total daily volume accounted for by retail investors is between 20% and 40%.

Moreover, retail trades of Zero Days to Expiration options, or 0DTE options, make up between 50% and 60% of trading volume, with 0DTE options trades making up most of daily options trading volume. Among Gen Z today, nearly half trade on a weekly basis and 25% trade daily. What the GME short squeeze demonstrated was the power of social investing and communities like WSB in coordinating this huge and growing group of investors.

While tracking retail investors closely did not occur overnight after 2021, dashboards and commercial products for monitoring crowded shorts and options activity proliferated.

One of the most used platforms among institutional investors is VandaTrack, a real-time data platform that provides investors with daily insight into global retail investor activity. Firms also use tools created by companies like S3 Partners and their Black App to get real-time visibility into crowding, covering, and financing trends, as well as to monitor squeeze risk.

On the options monitoring side, platforms like Unusual Whales, Market Chameleon, and SpotGamma scaled dramatically after 2021 as institutional investors began to use these tools to more closely monitor options flows, especially on the retail side.

Related more directly to sentiment, large firms like Goldman Sachs and J.P. Morgan have since marketed products that allow institutional investors to trade alongside retail sentiment and monitor it through data intelligence.

Goldman Sachs, for its part, now offers tradable baskets like GSXUMEME, consisting of U.S.-listed equities that are most popularly mentioned on retail communities like WSB. In a related vein, it also offers GSXUMSAL, or a “Most-Shorted Names” Index, which runs alongside the retail sentiment basket as a squeeze-risk monitor.

J.P. Morgan has long offered investors written reports and data sets tracking market timing indicators, such as “Signal from the Noise,” retail trading activity, such as “Through the Retail Lens,” and regional market sentiment, such as “Bull/Bear Buzz.” The firm has added more features and API accessibility while expanding coverage after 2021. The “Bull/Bear Buzz” offering specifically leverages big data techniques to skim news, social media, and web search sentiment.

Nowadays, retail flow has shifted from background noise to a core market signal, spurring a wave of institutional tools built to track and trade it.

Social Investing Winners and Losers

At a micro level, there are countless members of the WSB community that have made and lost vast sums of money, and the nature of social investing means that stories in both instances are constantly shared on social media. Stories like that of Keith Gill or “Intel Grandma” have already been mentioned as notable examples.

Before 2021, however, people were already sharing their “wins” and “how to win” on the WSB subreddit. One notable instance of users “gaming the system” included an “infinite money glitch” related to Robinhood, where WSB users discovered a bug on the trading platform.

The glitch allowed them to sell covered calls with money borrowed from Robinhood and then borrow even more money after the cash from the sale was added to their account, repeating this loop indefinitely. One user, “ControlTheNarrative,” was immortalized in 2019 for using the glitch to lever himself 25x, turning a $2,000 deposit into $50,000 worth of stock.

Some of the stories of the biggest wins and losses on WSB often involve the use of leverage. In one post from January 2023, a user YOLO’ed and bet $120,000 in previous gains on selling Tesla call spreads. Once positive results from earnings came out the next day, the stock surged 33%, and the original poster lost over $136,000, leading other Redditors to remark on his “craziness.”

From a broader point of view, the rise of WSB and social investing has created external groups of winners and losers as well. After the rise of GME stock in 2021, for example, GameStop was able to turn around its unprofitable operations. The stock’s continued relevance as a meme allowed CEO Ryan Cohen to complete three at-the-money equity offerings starting in 2024, raising over $3.5 billion in cash.

Outside of building up the strength of its balance sheet, GME pivoted toward marketing collectibles and, upon Cohen’s appointment as CEO in 2023, heavily scrutinized expenses. With billions in cash, GameStop purchased thousands of bitcoins, making GME the 14th-largest bitcoin holder in the world. As of today, the company is even considering a multi-billion-dollar acquisition of retail behemoth eBay. All these innovations led to a more resilient company and could not have happened without the interest generated by WSB.

With respect to institutional investors and financial firms, while some firms incurred huge losses at the hands of retail investors piling into their heavily shorted positions, big banks and other companies offering products related to retail sentiment have been winners, like Goldman Sachs and J.P. Morgan as discussed above.

Ironically, Robinhood has also emerged a winner. The company faced deep scrutiny from both regulators and retail investors amid the GME surge due to halting trading on the stock at its peak. However, since its IPO in 2021, the firm has redefined its operations and built upon the capital, notoriety, and user base it gained from WSB to stage a comeback since 2024.

Rather than relying purely on Payment for Order Flow for revenue as it did in 2021, the company’s business model now has a four-pillar structure with transaction-based revenue, net interest income from customer cash and margin loans, Robinhood Gold subscription revenue, and credit and lending through its Gold Credit Card. The stock had been on the rise until recently.

From viral wins and catastrophic losses to corporate turnarounds and institutional profits, WSB turned individual trades into market-moving narratives, creating winners and losers far beyond the subreddit itself.

Why do meme stocks still matter in 2026?

On size alone, the WSB community is still relevant in 2026. From 2021 to today, the community on Reddit has expanded to 16 million members. The content that was once confined to its subreddit now often spills over to other pages on platforms like X, making message amplification much quicker and much bigger.

In terms of meme stocks, the D.O.R.K. stocks rally in 2025 proved that the volatility seen during the GME surge in 2021 was not simply something of the past. Over a period of just six days, Opendoor (OPEN) shares rose 312% and options volume rocketed to 34 million contracts on its stock alone, surpassing the volume seen during the original GME rally. For any investor, a name with social resonance always carries the potential now of meme status or “going to the moon.”

Retail investors, especially within the WSB community, have also become more sophisticated in 2026. Beyond the ballooning use of options, leverage, and a rising interest in investing generally, users today are self-aware about entry and exit points on stocks, now forgoing the simple old mantra of having “Diamond Hands.”

Sophistication of retail investors generally has increased with the advent of AI. Traders outside of institutions now use new LLMs to generate stock ideas and can refine queries using meme-stock logic, such as “find me stocks with high short interest.”

Finally, meme stocks and WSB still have cultural relevance in 2026. The retail trading that has captivated many investors since 2021 is a source of entertainment, not just a technical way to build wealth. If a stock is meme-ing, buying in is a way to join the zeitgeist.

Retail investor participation has only grown in the past decade, and especially among young people. With a generation of Baby Boomers set to turn over more than $100 trillion in wealth to Gen X, Millennials, and Gen Z by 2048, self-directed retail investment is likely to continue its rise.

In 2026, institutional investors have already made note of the fact that market sentiment and retail flows cannot be ignored. Fast reactions to social investing activity are now a requirement and something that will remain relevant going well into the future.

Conclusion

Five years after the GameStop short squeeze, the legacy of WSB is no longer a question — it’s a structural feature of modern markets. Meme stocks, retail investor sentiment, and options-driven volatility have reshaped how both individuals and institutions approach investing.

What began as a fringe online community has evolved into a real-time signal generator, capable of influencing price action, risk management, and even corporate strategy. For retail investors, the opportunity — and risk — has never been greater.

For Wall Street, ignoring the crowd is no longer an option. In 2026 and beyond, markets are not just driven by fundamentals, but by participation, narrative, and speed, where a single post can still move prices in extreme ways.