Thousands Of Bots May Have Played Role In GameStop Hype: Report
According to Reuters, bots have hyped GameStop Corp (NYSE: GME) and other so-called meme stocks on social media platforms.
What Happened: According to Massachusetts-based cybersecurity firm PiiQ Media, some organized or foreign actors may have played a role in hyping those stocks that have soared and crashed this year - and sometimes soared again.
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The company examined posts on Twitter, Facebook, Instagram and YouTube and found that bots were using the platforms to push GameStop and other meme stocks.
However, it was unclear whether or not the bots' posts were influential, Reuters noted, and the company failed to investigate Reddit where the excitement over GameStop and other stocks was center stage.
According to the analysis, there are tens of thousands of such bot accounts used to hype stocks, as well as the cryptocurrency Dogecoin (CRYPTO: DOGE) on social media platforms.
The U.S. Securities and Exchange Commission is investigating market volatility related to meme stocks and on Friday suspended trading of 15 companies citing questionable trading and social media activity.
Why It Matters: Volatility could have lasting effects on how markets are regulated.
The January frenzy hit international headlines and even resulted in a US Congress hearing last week. The volatility in the markets alarmed politicians on the left, who again called for tax-stock transactions.
The situation also focused on the practice of "paying for the flow of orders" both on and off Wall Street. Paying for the flow of orders has enabled platforms, led by Robinhood, to enable commission-free stock trading - a major factor behind the influx of retailers into the markets over the past year.
Photo courtesy of Pixabay.
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