WallStreetBets Founder Is 'Fascinated' Watching GameStop Frenzy From Sidelines
MICHEL MARTIN, HOST:
We're going to start talking about those wild last couple of days in the stock market - days that have gotten everybody from the speaker of the House, Nancy Pelosi, to late-night talk show hosts to high-profile business people like Mark Cuban weighing in.
It all traces back to a Reddit community called WallStreetBets, where users share trading advice, brag about big wins and losses, and, as this week showed, sometimes band together to goose up the price of stocks like GameStop, AMC and Bed, Bath and Beyond - and while they're at it, squeeze hedge funds and other big-time players.
These trades are not investments made for the old retirement portfolio. No, they are not. But what are they? Is this gambling? Is this market manipulation? Is this a way to level the playing field, fair or unfair? And to whom? As we said, there are so many perspectives about this, we decided to just go for one today. So we called the founder of that Reddit community, Jaime Rogozinski. And thank you so much for being with us.
JAIME ROGOZINSKI: Yes. Thank you very much for having me.
MARTIN: Could you just start by telling us the origins of this group? I understand that you founded it in 2012. What was the idea?
ROGOZINSKI: Yeah, I did found it in 2012. You know, I was single at the time. I had a job. I had a decent disposable income, and I was looking for a way to grow that disposable income. And around the same time, we started getting a lot of these low-cost brokers online that you could do stock options with, so access to the markets was easier than it was previously, and looking for a place where we could discuss high-risk, high-return trades with the market. And in the absence of finding one, I decided to create it.
MARTIN: What's been going through your mind as you've watched all this unfold?
ROGOZINSKI: Quite frankly, it's a bit of bittersweet because if I was still the moderator, this wouldn't have happened. I'd prevented this type of thing frequently. But to that same extent, the level of conversation and interest in the importance in this - what appears to be a movement that's starting is one that I've always been really passionate about. So, had I stayed there, we wouldn't have had this. But that said, it's fascinating to watch. I'm enjoying it. I still feel like this is a great conversation that the whole world is having right now.
MARTIN: Well, tell me both sides of that. Take those two separately for me. Why are you enjoying it? And if you were the moderator, why would you have kept this from happening?
ROGOZINSKI: So when I was moderator, people tried to do this type of thing where they'd band together and raise a stock. You can't always do that. There's something specific about these particular stocks that makes them susceptible to this type of price movements. But we detected one instance of somebody trying to do this.
I had lawyers. I consulted with them. I said, I don't know if this is legal. Is (inaudible) legal? I'm not quite sure. They said, look, it's - you know, you could turn it illegal if you say certain things or do certain things, but it's kind of a gray area with no precedent. And I decided to take that answer and say, no, I'm going to block these efforts. And I did block all subsequent efforts because I didn't want to risk the community. That was a personal decision.
But on the other side, I'm really enjoying the fact that this happened because the whole reason why I created WallStreetBets and all these things that I've done throughout my life - I have this deep-seated passion towards realizing that there's absurdities in the market, that there's a lot of systemic weaknesses in the market, and nobody's done anything to address it. It's been symbolic. And my way of protesting is to try and push it to the extreme.
MARTIN: Well, you know, to that end, though, you were removed as moderator in April. People are very annoyed with you for speaking out. There's a lot of intense feelings about it. I mean, obviously, the substance of it - you know, I don't assert the truth or falsity of sort of any of these claims, but it is interesting that there's so much intensity around it. I'm just wondering, is that characteristic of the community? Is it very kind of in-your-face?
ROGOZINSKI: No. I'm not really interested in going back to them because it's all lies. And I - you know, I'm just going to feed the trolls if I go into it.
MARTIN: One of the interesting things about this story is people like Congresswoman from New York Alexandria Ocasio-Cortez, Senator Elizabeth Warren, Stephen Colbert, the late-night talk show host - you know, all these people see something in it, and they see different things. I mean, some people think that, you know, it is about small investors banding up to rise against the powerful. Other people say, no, this is basically the Wild West, and somebody's got to intervene. What do you think?
ROGOZINSKI: So you have voices on one side - let's protect the little guys. And you have voices on the other side that say, the system is breaking. They're both right. I do believe they're both right. But there's two categories of things that need fixing.
The financial markets have been very slowly creeping away from their original intention. Companies that are going public - they used to go public to raise funds, to be able to innovate and blah, blah, blah. Now they raise funds before they go public, and they go public just to pay back the investors.
You know, you start seeing these things like SPACs, the special purpose acquisition companies, that are very popular this year, the shell companies. There's no employees, there's no anything. There's just, hey, I wish I could do something, but I don't have money. Give it to me, and I'm going to see if I can do it. That has nothing to do with the original intention.
And on the other side, we need to give the little guys a voice, too. For too long, it's been an invite-only club and the elites in Wall Street and nobody on Main Street.
MARTIN: That is Jaime Rogozinski. He is the founder and a former moderator of Reddit's WallStreetBets community. Jaime Rogozinski, thanks so much for talking to us. I hope we'll talk again.
ROGOZINSKI: Thank you very much.
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