A cybersecurity firm discovered that bots hyped GameStop stocks on different social media platforms. These intelligent programs were the ones that promoted the stocks, which led to its quick rise in February.
PiiQ Media, a cybersecurity firm based in Massachusetts revealed to Reuters that social media bots were heavily used in promoting different stocks, among them were GameStop and Dogecoin. The firm examined keyword patterns used like "Hold the Line" and the stock symbol of GameStop, GME, across profiles and conversations before the controversial fiasco on Jan. 28. The firms said that the bots also promoted other "meme" stocks through posts on Facebook, Twitter, Instagram and YouTube.
According to The Verge, PiiQ estimated that there were thousands of bots that were involved in the promotion of the stocks. However, they still could not pinpoint or put numbers on the rate of influence that they had on the stock activities of GameStop, as well as on other stocks.
In January, the the stocks of GameStop saw a huge increase, and as per PiiQ, they saw "patterns" that indicated artificial behavior in posts related to the said stocks. At the time, Reddit users were rallying behind the stock, attempting to squeeze hedge funds that betted against the company.
Reddit CEO Steve Huffman, during a hearing before the House Financial Services, defended the role of the platform in the surge of GameStop stock. He said that the moderation mechanism of Reddit makes the platform good at filtering bad information. He added that a financial advice that comes from Reddit users may actually be considered as more reliable as compared to information derived from traditional media, primarily because the community vets the information.
Huffman stated that the platform allows users to vote comments up or down. This method increases or decreases their visibility. Communities have their own moderators, who help in enforcing the rules. He also highlighted that Reddit hugely invested in the voting system. He says that WallStreetBets moderators, which is a longstanding subreddit channel where more than 3.5 million Reddit users talk about highly speculative ideas and strategies on trading, did an excellent job.
PiiQ noted however, that it did not analyse the traffic in Reddit. The Securities and Exchange Commission is investigating the GameStop stocks.