Stock Memes: How Jokes on Reddit Quietly Changed Wall Street Forever

A screenshot of a brokerage account in red ink, a picture of a rocket ship, and a pair of diamond hands are all frequently posted on a specific section of the internet. The tone is in the middle of religious devotion and humor. Surprisingly, real money is frequently at stake. One of the most peculiar cultural forces in contemporary finance is stock memes, which are the pictures, jokes, and inside jargon that surround retail trading. They were jokes at first. These days, they are more than just jokes.

By now, the origin story is practically considered canonical. A struggling brick-and-mortar video game retailer with one of the highest short-interest ratios on the market, GameStop, was the subject of videos posted by Reddit user Keith Gill, better known online as Roaring Kitty, in late 2020. He didn’t make grandiose claims to boost the stock. He made sincere, slightly silly videos, talked through income statements, and wore a red headband. From there, the r/wallstreetbets community took it from there. GameStop had skyrocketed from about $5 to almost $500 by January 2021. A well-known hedge fund, Melvin Capital, almost failed. A 45-page report was written by the SEC. Additionally, a term that most Wall Street veterans had never used in a serious setting—”diamond hands”—found its way into testimony before Congress.

Five years later, it’s amazing to see how little the phenomenon has truly diminished. Its shape has changed. It is now more conscious of itself. In certain instances, it has turned into a clear joke about itself. However, it hasn’t vanished. Gill reappeared on X in May 2024 with just one mysterious image: a cartoon character leaning forward in a chair. Not a text. No suggestions. After the post received over 24 million views, GameStop’s stock nearly doubled once more in less than 48 hours. An estimated $1.3 billion was lost by short sellers. That was accomplished by a drawing of a man sitting in a chair. It’s worth pondering both the ridiculousness and the reality of that statement.

This isn’t your typical investor community, just based on the language. “Tendies” for financial gain, following fried chicken. For members, “Apes” refers to a Planet of the Apes meme. “BTFD” stands for “buy the fucking dip.” “To the moon” using emojis of rockets. “Paper hands” are those who sell during a downturn. A CFA textbook doesn’t contain any of it. Markets are moved by all of it. Reading r/wallstreetbets or its more recent offshoots, such as r/MemeStockMarket, gives you the impression that a folk culture is emerging in real time, complete with its own slang, heroes, and villains. The retail trader is the tenacious hero, while the hedge fund manager is the eternal villain.

In this case, the cultural context is important. Meme stocks did not appear out of nowhere. They came during the COVID-19 lockdowns, when millions of people had access to zero-commission trading apps like Robinhood, time, and stimulus checks. Boredom, money, and frictionless markets all worked together to create the ideal environment for a movement that combined social bonding, protest, and investing. Wall Street was the target. Collective attention served as the weapon. The meme served as the currency.

A more recent twist is almost too obvious to be true. The sustainable shoe company Allbirds, which has been struggling for years, should simply rebrand as “NewBird AI” and watch its stock rise 461 percent, according to a recent joke on r/MemeStockMarket. In a serious argument, another user suggested that UiPath rename itself “Path.AI” or “AI.PATH” in order to address its narrative issue. Whether or not those arguments are correct, they highlight a fact: in today’s market, how you are perceived frequently matters just as much as what you do. And that framing is shaped more by stock memes than by nearly any other channel. Meme sentiment is now tracked by Bloomberg’s quant desks. Reddit-driven flows are identified by JPMorgan’s internal models. Hedge funds were “systematically analyzing” meme stocks, according to a 2021 Financial Times article. That analysis is still ongoing.

It’s difficult not to think of stock memes as existing at an odd nexus of democratization, entertainment, and real market risk. In January 2021, there were many meme traders who survived the crash and ended up much worse off than those who made life-altering profits. Quietly, the SEC report on the events of 2021 came to the conclusion that although the incident seriously harmed certain funds, it did not pose a systemic threat to the financial system. However, that decision speaks more about the system’s absorption capacity than it does about the significance of memes. The larger narrative, which is still developing, is that retail investors discovered they could influence prices by working together through jokes. Perhaps the most important question of the decade is whether that is a flaw or a feature of contemporary markets.