- Lorenzo Carver
Retail Investor stock interest declines Post-GME
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Before we start: Please note that many prominent subreddits have been attempting to capture and eliminate fake or inaccurate posts and as a result, this may skew some results.
Number of subreddits analyzed: 26
Analysis time range - hour by hour analysis between 4/10/2021 - 5/10/2021
Retail Investor Participation across Reddit is decreasing
GameStop, AMC, and BlackBerry brought many new Retail Investors into the market as interest in the cultural phenomenon pushed 'active' trading into the spotlight.
However, as time has passed and hype has died down, many Retail Investors felt they were left 'holding the bag' as they wait for a short squeeze or 'moon' event to occur.
As a result, a few trends have started to form among Retail Investors.
A consistent decline in posts and comments interested in Stocks.
A large decline in the overall post and comment volume across popular investing subreddits.
Diminished trust between Retail Investors as fears of 'infiltration' by Hedge Funds and paid contributors to market a particular stock.
Fears of a stock market correction as there is a wide belief the market is overvalued.
Declining Participation Rates over the last 30 days
Notable Statistics:
The average comment volume across 26 investing subreddits is down day over day.
Averages would be even lower if therecent MVIS hype interest did not manifest.
Analysis:
Comment volume continues to decline as the initial 'hype' of meme stocks has lost its luster. New Retail Investors are falling out of love with 'over-hyped' content from other contributors, fearing they are being manipulated into 'bag holding'.
As a result, participation across Reddit as a social medium is declining as people lament with comments such as "if its made it on Reddit, you've already missed the boat".
Comment and Post volume is down on popular subreddits like WallStreetBets
Post the GME bubble, rate of new posts have decreased. Additionally, subreddit moderators have taken a stronger stance on posts in order to eliminate spam, shilling and bots.
More importantly, comment volume is down across the board. Typically when posts are suppressed, comments will still a place for Retail interaction. Despite moderator goals to suppress posts, comments are on the decline across the board as well.
Chatter & Reddit Discussion Analysis
Common discussion threads are happening across a wide range of popular stocks:
Inflation fears
Concerns of pump and dump posts across multiple subreddits
Interest in the rotation out of growth equities into commodities
Discussions of an upcoming market correction or crash
Final thoughts:
Waning stock interest, a perception that Retail Investor cannot trust their fellow investor, and an uncertain market is leading people to reduce how active they are with investing.
General strategies have started to evolve surrounding Options/Puts on equities and the transfer of portfolios into commodities and bonds as retail investors prepare for a market correction.
Lastly, meme stocks of 'old' are 'out' with Retail Investors becoming warier of their fellow advocates and the stocks they may suggest.