Reddit WallStreetBets movement was 15 years in the making

The Redditor uprising that has messed up stock markets in recent weeks owes its origins in part to a humpback whale named Mister Splashy Pants. In 2007, Greenpeace asked the public to determine the name of a whale in the South Pacific for a campaign to raise awareness about hunting by Japanese fisheries. A group of pranksters organized on the still-developing Reddit message board to hijack Greenpeace’s online poll and push their chosen name. The organization and netizens struggled for weeks until Greenpeace finally relented and Mister Splashy Pants was crowned.

Two years later, Co-founder of Reddit Inc. Alexis Ohanian shared the joke in a TED Talk. “Over the past four years we’ve seen all kinds of memes, all kinds of trends are born right on our front page,” he said. “This is how the internet works. This is the big secret. The internet ensures a level playing field. “

The Greenpeace caper was such a meaningful event for the company that Reddit temporarily changed its logo to a whale flexing its bicep fins. Mister Splashy Pants would provide a model for Reddit, formed over more than a decade, that gave rise to cultural touchstones and charities as well as organized harassment and dangerous conspiracy theories. It also provided an early roadmap for WallStreetBets, a forum of amateur day traders who used Reddit to spark the stock market frenzy.

“The message is no longer just coming from above,” Ohanian said in the 2009 speech. “You have to be okay to lose control.”

Reddit has long earned a reputation as a place where anything goes. The best and worst of the internet was on display in full. Reddit took small steps last year to reduce the ugliest behavior by introducing its first-ever hate speech policy. But it remains a venue where controversy is allowed, hijinks are encouraged, and a joke quickly gets out of hand.

The trade crusade of recent weeks, which pushed up the price of nostalgic stocks such as GameStop Corp. and AMC Entertainment Holdings Inc., was part a joke and part a way of punishing hedge funds that go short on those stocks. It worked. Ohanian, who stepped down from the Reddit board last year, and his co-founder Steve Huffman clung to the populist argument. The founders, both 37, have said that WallStreetBets shows that people can work together to influence established institutions.

“I think for a lot of people this was both a statement and an investment,” Ohanian said in an interview on Bloomberg TV. Huffman, the CEO, described it as a “Wall Street culture war against everyone else”.

But the victims go beyond hedge funds and stock trading apps like Robinhood Markets Inc., die rushed to emergency capital to cover volatility risks. US regulators are investigating social media posts for clues possible fraudulent activity behind the transactions. With trendy stocks collapsing, those who bought high aren’t laughing as hard as before. “I’ve been looking at my phone non-stop for the past week and I’m devastated,” said Scott Smith, a Reddit user who lost about $ 1,300 trading GameStop stock. “I’m going to take a long break and focus on my student loans before thinking about stocks again.”

Ohanian and Huffman met as students at the University of Virginia, where they, along with another classmate, started Reddit in 2005 as a place to share and discover web pages and news articles. They were drafted into the first class of a new Silicon Valley business incubator called Y Combinator. With $ 100,000 in venture capital, they cultivated a small population of users who filled the site with their own posts and voted for their favorite content.

Condé Nast, publisher of the New Yorker and Wired, acquired Reddit in 2006. In the following years, the founders left; Condé Nast made the company independent; and a few outside CEOs tried in vain to tame the Reddit crowd. One of these was Ellen Pao, a former venture capitalist at Kleiner Perkins. Pao is critical of the way Huffman, her successor, deals with hate speech, intimidation and other disturbing activities on the site. And with WallStreetBets, she said that Reddit failed to provide adequate safeguards for people caught up in the craze.

“Reddit should add a disclaimer because I don’t believe all 6 million people in r / wallstreet bets, and the people who followed them, know exactly what they’re getting into,” Pao wrote in an email. (The forum now has more than 8.6 million readers.) “Being transparent about risks is ethical.”

Huffman’s response to controversy on the site has been inconsistent and often late. He’s treated critics with the same tactics as Reddit’s trolls. On at least one occasion, he secretly edited a number of comments that were critical of him, something for which he later apologized. Pizzagate, an internet-native conspiracy theory falsely linking Hillary Clinton to a pedophilia ring, thrived on Reddit before Huffman intervened to ban the community in 2016.

He allowed another group, The_Donald, to spread racist messages for years. In an interview with the New Yorker in 2018, Huffman said some people on the forum were just expressing political beliefs, “and that’s something we want to encourage.” Reddit banned the group last summer and expelled a similar group last month after members stirred up and celebrated violence in the Capitol. Reddit declined to make Huffman available for an interview.

The building blocks of Reddit have been around since the early days of the internet. People shared tips for trading stock on Yahoo! bulletin boards and conducted polls on GeoCities. But there is a certain aspect to Reddit’s system where anyone can vote up or down practically anything on the site that brings out the inner shock jockey in users. Some treat it like a game, Huffman told de New Yorker: “‘If I post this ridiculous or offensive thing, can I get people to vote it?” And then some people, to quote The dark knight, you just want to see the world burn. “