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WallStreetBets: Meet the founder of the forum that sparked a meme-stock frenzy

WallStreetBets logo
WallStreetBets helped spark a meme-stock phenomenon, with the likes of GameStop and AMC, among others, seeing a dramatic surge in value. Photo: Igor Golovniov/SOPA/LightRocket via Getty (SOPA Images via Getty Images)

WallStreetBets is a name that was often seen trending on Twitter (TWTR) last year, rising in popularity during the pandemic after social-media-fuelled trading led to wild swings in the market.

The Reddit board helped spark a meme-stock phenomenon, with the likes of GameStop (GME) and AMC (AMC), among others, seeing a dramatic surge in value. Reddit WallStreetBets users and Wall Street short-sellers clashed and went head-to-head for months, causing a short squeeze on various stocks.

A short squeeze forces those who bet against the stock to buy in order to forestall bigger losses, sending the stock price much higher.


This left Wall Street institutions such as hedge fund Melvin Capital, sitting on billions of dollars in losses, highlighting the new power and weight of retail investors in the market.

The New York-based investment management firm closed out of its GameStop short position on 27 January, ending the month with $8bn (£6bn) in assets under management, compared with the $12.5bn it started the year with.

“WallStreetBets was already on an exponential growth, 2020 just sped up what was clearly writing on the wall,” founder Jaime Rogozinski told Yahoo Finance in an exclusive interview.

“All of a sudden, you have people that hear about WallStreetBets for the first time because of GameStop. And they say what is WSB? Oh, okay, WallStreetBets is the one that pushed the price of GameStop up, okay, so that's what they do.”

“And that's the categorisation that it receives as a mob of individuals they can just outnumber an institution when it comes to pushing a price where they're missing the point.

Read more: 2021: The year when memes humbled hedge funds

“What WSB does is not push the price of a stock up, that's not WallStreetBets. They're there to learn, to have fun, to take risks, and to try and make money.

He added: “WallStreetBets takes its name from saying, hey, if there's any critics check your criticism at the door, because this is called WallStreet… Bets. We're speculating, we're having fun. This is a casino; let's get creative, and let's enjoy this together.”

Shares of Bed, Bath and Beyond (BBBY), Express (EXPR) and Koss (KOSS), which were all heavily shorted by Wall Street’s elite, were also caught up in the retail frenzy, as well as Sundial Growers (SNDL) and Blackberry (BB).

Watch: Wallstreetbets subreddit founder advises calm amid stock market volatility

Speaking about his background, Rogozinski said that he had always been entrepreneurial, leaning towards technology and economics.

“That's what I studied in undergrad, and I studied some finance, but I was always starting businesses all the way through high school and out of college. I was just a natural risk taker and a go-getter.”

Rogozinski, now 40 years-old, lost his job in 2008 due to the financial crisis, and later found a new one at a bank doing technology and finance-related work.

“I decided, never again… I'm going to figure out a way to have myself a comfortable nest egg so that I don't have to go through being unemployed. And that's when I started playing with the stock market,” he said.

“I was looking to take the little money that I had extra, a few thousand a month that I could afford to risk, which was enough for me to say, this you can leverage into some big money and I started learning about different instruments like stock options and things of that nature.

“I was also trying to find an area online that I can learn from, like a group of people that we can just share ideas with, for this high risk, high return type of trading style.”

“WallStreetBets was already on an exponential growth, 2020 just sped up what was clearly writing on the wall,” founder Jaime Rogozinski said. Photo: Jaime Rogozinski
'WallStreetBets was already on an exponential growth, 2020 just sped up what was clearly writing on the wall,' founder Jaime Rogozinski said. Photo: Jaime Rogozinski (Jaime Rogozinski)

The entrepreneur first created WallStreetBets in 2012, as a platform for people who wanted to share, invest and know more. He has since written a book titled WallStreetBets: How Boomers Made the World's Biggest Casino for Millennials.

“People just organically started showing up, and it was a nice combination of actual knowledgeable individuals that are there to share, and people that are in that same mindset that I was in. They were young, meaning they can afford the risk, with no dependents.

“And then you have people that are professionals, or knowledgeable individuals that are having fun with this concept.”

A decade later, WallStreetBets' subscriber numbers were still growing, and as the coronavirus pandemic came along, it left people left stuck at home with more time on their hands.

“The pandemic really fuelled the retail stock market, people at home, getting their government checks, they're bored, looking for ways to make money.”

READ MORE: Amateur investors chase profits during the pandemic

The dramatic price shifts, and surge in do-it-yourself investors, left many wondering if this phenomenon was set to repeat itself in future, and if retail traders had found a new voice, or even as much as a new source of power.

Rogozinski said: “All of a sudden, [retail investors] are saying we have a voice in this market too, we actually can be considered a player to the point where people actually care what we have to say or do – which is incredibly empowering for the individuals, for the little people."

But he believes the AMC and GameStop rises, as seen in early 2021, will not be replicated in future in the same way.

“It is unlikely that we will get to see that again, mainly because the market itself is wise. A lot of the manoeuvres that were done in order to make GameStop work have already been plugged. It wasn't just people buying this stock, it was more much more than that.

“There were a lot more participants who had dealt with the size of the company, the short float that was out there, it was helped by what was going on in the news with the different hedge funds.”

AMC's stock price has fallen since the start of the year. Chart: Yahoo Finance
AMC's stock price has fallen since the start of the year. Chart: Yahoo Finance (Yahoo Finance)

He added: “The market is now putting defences against that type of volatility but that's great, because now this inefficiency has been fixed. The market is slightly better and more robust and more sustainable than it was prior to GameStop.

“But there's gonna be another one, absolutely, there will be another one, it's not going to be the same. Maybe it will result in the price of the stock going up. Who knows. But it won't be doing that same manoeuvre with the gamma squeezes, and all that other stuff.”

Rogozinski, who is no longer a moderator for the subreddit after clashing with Reddit admins, added that WSB as a concept continues to grow, including outside the subreddit.

There are social media accounts on a variety of platforms, with different flavours of WSB, whether they be geographic, like KoreaStreetBets, or IndiaStreetBets, as well as instruments specific, like SilverStreetBets or SatoshiStreetBets for cryptocurrencies.

READ MORE: Hargreaves Lansdown boosted by surge in young people trading stocks

Rogozinski is still dedicated to helping and growing communities who want to learn about investing and stocks, with a new push into finance entertainment.

“I'm making a play for providing this finance entertainment brand. So this can come in the form of podcasts and websites for digesting news and for commentaries, opinions, TV shows, reality shows about traders,” he said.

“There's this massive audience now that is hungry for news and information about finance, but in the ways that they like to ingest it. You don't have to know about the company's price earnings ratio to make these things; you can literally look at the chart or think the CEO is quirky and you can be just as right.”

He is also set to speak at a Masterclass on Saturday with XTB. This will include trading strategy for stocks such as the tell-tale signs of a stock rally and correction, as well as pro traders' risk management strategies.

Looking towards the future he sees the lines between cryptocurrency and stock continuing to merge, as seen with ETFs and synthetic stocks surrounding blockchain.

“I see things going in that direction, and in the world of crypto specifically. It's so new that the number of inefficiencies waiting to be exploited are infinite. It's just so easy to find inefficiencies and exploit them right now.

Watch: What are NFTs?