Abstract
On January 12, 2021, a group of small investors coordinated a series of trades over the course of a few weeks in an effort to affect the positions of large hedge funds who short stocks. These large hedge funds were unaware of the tsunami that would overtake their short positions causing losses in the billions of dollars. A number of economic theories can provide insight into some of the activities of buyers; however, the retaliatory aspect of these small investors is new. The aim of this paper is to explore these actions using classical economics, behavioral economics and social coordination. Our aim is to collect and analyze stock market activity for stocks such as GameStop, AMC, KOSS, and Nokia, then retrieve the posts from Reddit to determine whether or not these activities could be predicted, as well as determine when a critical mass was obtained to successfully execute these stock trades.