How Redditors Find the Next GameStop Stock
There is a method to the madness on WallStreetBets. For every stock that soars like GameStop Corp. and AMC Entertainment Holdings Inc., many more names touted on the Reddit site fail to launch.
A Wall Street Journal analysis of millions of posts on WallStreetBets, the performance of the most-mentioned companies each month and interviews with traders show what makes a stock take off.
Stocks with the highest chance of success tend to have low share prices, typically under $25 a share, and be lightly traded. Low share prices allow small-time traders to more easily accumulate stakes and can sometimes signify cheap valuations. Share prices of lightly traded stocks can more easily be pushed higher or lower than shares of stocks that are more frequently…