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What the heck is r/WSB? How did a small mobile app called Robinhood disrupt the Titan’s on Wall Street?

What the heck is r/WSB? How did a small mobile app called Robinhood disrupt the Titan’s on Wall Street?

When was the first time you heard about r/WallStreetBets or RobinHood? If you’ve been following financial disruption at all, it was about two years ago, when the “infinite leverage” glitch catapulted the Reddit sub and the app into fame.

The stock trading platform for “the little guys,” the RobinHood app makes it easy for anyone to trade. Not just stocks, but options. And that means that at-home, single-person traders (like Redditors) have the ability to place trades (really, bets) that can get them practically infinite income… and practically infinite losses.

YOLO: The Culture of r/WSB

The denizens of WallStreetBets call themselves “autists.” This isn’t as denigrating as it sounds; it’s praise, to them. While not politically correct, it’s their way of saying that they focus on one thing and only one thing. Sometimes to the detriment of the rest of their life.

And sometimes they’re horribly wrong. But often they’re horribly right. Either way, they disrupt.

r/WSB users focus on “YOLOing” stock. In other words, they place very large positions on things that are essentially gambles. But the beauty and complexity of WSB is that they often aren’t gambles. Usually, the people on r/WSB are trading on news, which are entirely valid ways to trade.

Moreover, r/WSB takes advantage of a cyclical effect. While they aren’t organized (and therefore aren’t illegal per the SEC), they have significant visibility. When someone posts that a stock is “winning” for them, others will fall in line. From r/WSB, it eventually gets into the mainstream media. This all crystallized with GME.

But again, this isn’t anything that anyone else hasn’t been doing for a long time, such as stock reports on the news.

GME: WE LIKE THE STOCK

Tune into r/WSB and you’ll see everyone saying something very simple about GameStop: “We Like The Stock.” This is about more than just defying SEC’s collusion standards.

Way back in the before times of “a couple of weeks ago,” GameStop brought in a couple of executives from Chewy. Investors became bearish on the stock, expecting these executives to turn the retailer around.

This was around when people noticed that GameStop was incredibly over-shorted.

People started investing in GME because they genuinely did “like the stock”; they saw that it was undervalued because of the shorting. Essentially, hedge fund managers were trying to drive GME into bankruptcy by selling over 100 percent of its available stock.

RobinHood: Steal from the Poor, Give to the Rich?

However, the very same company that started the GME surge is the one that ultimately betrayed its own users. At the height of GME hysteria, RobinHood decided to restrict trading, so investors could only sell GME and not buy it. GME plunged to half its value before starting to recover again. And RobinHood wasn’t alone. Many other brokerages restricted trading GME for high volatility.

This is now being investigated, by such high-profile individuals as Alexandria Ocasio-Cortez and Ted Cruz. Essentially, brokerages were able to fix the price, because they only allowed for selling — theoretically to help hedge fund managers.

GME, AMC, BB: To the Moon

GME isn’t the only one that’s being promoted by r/WSB. AMC and BB are other stocks that those on WSB appear to have a consensus about: They think they’re undervalued. AMC was nearly driven to bankruptcy but received a cash infusion, and its problems are likely to be over after COVID. BlackBerry is leaning hard on privacy at a time when privacy is being questioned on almost every frontier. While some believe that these are distractions (the more people invest in AMC and BB, the less they’ll invest in GME), they’ve been on Reddit’s collective mind for a while.

GME was unique because it was so incredibly over shorted. It was over shorted by nearly 150 percent. Comparatively. AMC is over shorted by only about 50 percent (which is still a lot). But a short squeeze actually isn’t critical for market disruption; this was seen with TSLA’s explosive performance over the course of 2020.

What’s Next for r/WSB?

So, r/WSB is moving its money off RobinHood’s mobile app and there are a few new contenders for the crown. While the mobile app Cash App doesn’t allow purchases of GME, it does allow AMC — and it allows for the purchase of fractional shares. Stockpile still allows the purchase of fractions of GME. And other brokerages, like E*Trade and Fidelity, never stopped. 

r/WSB is still leaning into GameStop. After all, they like the stock. And now it’s become not just an investment but an ideological mission; a way to say “F-YOU!” to the Wall Street fatcats.

This isn’t illegal. It’s not even strictly frowned upon. r/WSB is just a collection of like-minded people discussing stocks and determining whether they like a stock. They have absolutely no inside knowledge; they only know what is reported from the outside. They then independently decide on whether they want to invest.

This is something that’s baked into the market. But never before has it been so easy for someone to invest directly into the stock market. People today can manage their own retirement accounts, buy their own stocks on their lunch break, and otherwise invest freely — and quickly.

Right now r/WSB is pumping up GME, AMC, BB, and… you probably won’t believe it… Dogecoin, a cryptocurrency based on a Shiba Inu meme. And as crazy as it might sound, there are millionaires being made overnight… and billions being lost… all on a mobile app.

The success of our agency is built upon the success and growth of our clients. Contact Colure’s Mobile App Development Team to discuss your next project and disrupt next industry.

Photo by Karolina Grabowska from Pexels

National Cyber Security Awareness Month

National Cyber Security Awareness Month

Cyber security is critical to your business. No matter your endeavor, the safety of your data is central to your success and security. At the heart of every business is data – passwords, financial transactions, employee data, and a host of other digital concerns. The protection you extend to this data is critical to your success.

October is National Cyber Security Awareness Month, organized by a joint effort between the U.S. Department of Homeland Security and the National Cyber Security Alliance. This alliance between private industry and the U.S. Government is celebrating its 16th year helping you protect your data.

Take a few moments to explore the issue of cyber security. StaySafeOnline.org coordinates many efforts to protect the digital concerns of individuals, small businesses, and large corporations. Simply put – if you have a computer, you are at risk. Anyone anywhere can be hacked. This group has created an extended list of free tools and resources for everyone to help define their individual risk assessment. Here is a technology checklist for your business’s cyber concerns. Examine your company’s digital resources, to become #CyberAware of your network’s security status.

The National Cyber Security Alliance has listed an extended series of events taking place around the globe during the month of October to discuss various aspects of cyber-security. Some of these events are virtual; others are physical. Take a look at this list to see if there are any events in your area that you may be able to attend.

We often use this space to discuss advertising or tech developments. This week, we felt we’d explore an issue that helps to define our security, our independence, and our freedom in the marketplace. If you cannot specifically define the security status of your system, you may not be aware of the actual nature of your exposure.

Chicago Cubs win the 2016 World Series!

Chicago Cubs win the 2016 World Series!

Tonight, magic was made.

A 108-year drought was washed away following a 17-minute rain delay Wednesday night when the Chicago Cubs won the 2016 World Series. For generations, Cubs fans have fought bitterly over who was the best. In the end, their love of the game and the passion it drives was rewarded with a storybook ending.

It was a fairytale story – 108 years in the making. Seven games in the series. Two teams were staunchly fighting to end their post-season loss records. The tension was incredible! Game Seven matched at 6-6 is forced into extra innings. If that wasn’t enough, the rain stretched the season out just a few minutes longer.

Whether you support either the Cleveland Indians or the Chicago Cubs, the folks who saw the game will admit that they watched sports history in the making. Lovers of baseball will talk about this series for another 108 years. It’s a safe guess that almost every baseball fan will remember exactly where they were when they finally saw the Chicago Cubs win the World Series.

New York will always give Chi-town a friendly-spirited run for their money, but for now, the Chicago Cubs have earned our Kudos and support! Congratulations to the Cubbies. Great job!

Top 5 Mobile Apps of 2015

Top 5 Mobile Apps of 2015

2015 has been a year of record-breaking, innovative, and truly impeccable mobile apps for both iOS and Android users alike. Where would we be without our beloved apps? While there are countless mobile applications that have emerged in 2015, here are a few that have been exemplary in their design, performance, and popularity over the past year.

From entertainment to everyday tools, the following list of apps represents a diverse selection of must-have apps for your everyday mobile use.

Clash of Clans (iOS/Android) – 2015 was the year Clash of Clans rose to stardom. The highly addictive game has gained a cult following and broke revenue records – making it the top-grossing gaming app of all time.

Snapchat (iOS/Android) – 2015 has been claimed as the ‘Year of Snapchat’, the past year has witnessed the rapid growth and success of the mobile-only social app.

Mint (iOS/Android) – Mint is a finance and budget manager for the modern man. It’s clean and sleek design makes managing your spendings surprisingly easy – and fun. 2015 witnessed a large usage of this app in various demographics.

Hopper  (iOS/Android) – A must-have mobile app for the frequent traveler, Hopper helps you predict the best times to fly and maximize your savings on flights. Named among the Best of 2015 in the Apple Store.

Paper (iOS) – An extension of your typical Notes application, Paper takes note taking on your mobile phone to the next level with tasks such as lists, charts, and sketches.

The collection of these mobile apps will surely keep you in the loop, highly organized and prepared for the upcoming New Year. However, the past year could not be defined without discussing one of the advertising industry’s greatest threats – ad-blocking. With businesses scrambling to find new ways to promote their products online, this influential app has given them a run for their money:

AdBlock Plus (iOS/Android) – Browse your Internet free from pop-ups and on-site advertisements.

As 2016 begins, we are excited to see the release of even more innovative and excellent mobile apps that will surely influence our mobile usage. Happy New Year!