Discord has banned the server responsible for the sudden boom in GameStop stocks following a dramatic uptick in unruly activity. The Discord server was spawned from the popular subreddit /r/WallStreetBets which has gained a lot of notoriety over the last week or so.
The stocks of several depressed businesses like GameStop skyrocketed this week due to a scheme known as short-squeezing. Essentially, /r/WallStreetBets was able to turn cheap stocks in companies like GameStop and AMC into riches by artificially inflating the value. The goal is to hold the stocks for as long as possible and gain unfathomable amounts of profit. Some users have already reported gains in the millions but plenty of others have also seen thousands in profit. At the end of December, GameStop stock cost about $20 a share and shot up to well over $300 this week, allowing those with even a handful of shares to make plenty of money.
Due to the high level of interest, /r/WallStreetBets has gained a lot of eyes on its Discord and subreddit. The subreddit is known for having a pretty toxic vibe within it, throwing around slurs and just having an overall frat house vibe. With more and more people coming in and seeing this, the troublesome behavior has only gotten worse, and it's even seeped into the Discord. After the market closed, Discord officially took the server offline and cited this offensive behavior as its reasoning. Discord made it clear in a statement (via The Verge) that this had nothing to do with the actual financial drama and was purely based on behavior. "To be clear, we did not ban this server due to financial fraud related to GameStop or other stocks. Discord welcomes a broad variety of personal finance discussions, from investment clubs and day traders to college students and professional financial advisors. We are monitoring this situation and in the event there are allegations of illegal activities, we will cooperate with authorities as appropriate."
Social media erupted in anger after this happened, calling out Discord for its timing. Many felt that this was done purposefully to try and squash /r/WallStreetBets' efforts as it could've taken action against the server anytime before but didn't. Shortly after this happened, /r/WallStreetBets briefly made its subreddit private which caused stocks to plummet for a short time. The stocks eventually came back up after the subreddit returned and a statement was issued.
"We’re suffering from success and our Discord was the first casualty. You know as well as I do that if you gather 250k people in one spot someone is going to say something that makes you look bad. That room was golden and the people that run it are awesome. We blocked all bad words with a bot, which should be enough, but apparently if someone can say a bad word with weird unicode icelandic characters and someone can screenshot it you don’t get to hang out with your friends anymore. Discord did us dirty and I am not impressed with them destroying our community instead of stepping in with the wrench we may have needed to fix things, especially after we got over 1,000 server boosts. That is pretty unethical."
Discord has not responded to this statement. GameStop has been on a downward spiral for a while now, especially after the Covid-19 pandemic began. The retailer announced they recently closed over 800 stores in the last few years, leading to a downward spiral in their stocks. This allowed those who got in on the short-squeeze to gain a very pretty penny simply due to how cheap it was to get in on it at the start. The White House is currently monitoring the situation but has not made any further comments.
Source: The Verge