Gary Gensler, chairman of the U.S. Securities and Exchange Commission
Al Drago/Bloomberg
A Securities and Exchange Commission’s campaign geared toward educating the public about responsible investing is drawing ire from the Reddit retail investor crowd.
In a video posted on the SEC’s YouTube channel, a game show contestant named Brad picks the “meme stock” category and hits the “invest” buzzer. He immediately loses a pile of cash and is hit in the face with a pie. His opponent is rewarded when she says she’s going to do some research first.
The portrayal of “meme stocks” has sparked anger on Reddit investing forums, especially those dedicated to shares of GameStop (ticker: GME) and AMC Entertainment Holdings (AMC). On the AMCStock forum, a top post jokes that, after doing her research, the second contestant still picked meme stocks.
Posts about the video dominated the GameStop-focused SuperStonk forum, including one that netted 8,400 upvotes after accusing the regulator, without evidence, of treason.
An SEC spokesperson did not return a request seeking comment on the reaction to the video.
GameStop and AMC shares surged in 2021 as users on social media sites bought up stock in the heavily shorted firms. Both companies capitalized on social media enthusiasm by selling stock and pursuing investments to turn things around. Both stocks have fared worse in 2022, with GameStop dropping 18% and AMC falling 53%.
The video is a part of the SEC’s “Investomania” public service campaign, which the regulator says is meant to educate viewers that investing is not a game and that they should do their due diligence before deciding whether to invest. In a companion quiz on the SEC’s Investor.gov site, the regulator suggests not making investing decisions based on what social media influencers, athletes, or entertainment stars are saying.
“A meme stock’s price may be based on internet popularity and social views, instead of a more traditional stock value, such as a company’s performance,” the quiz explains.
On WallStreetBets, the forum that helped popularize the meme stock term last year as users flocked to post images and videos cracking jokes about GameStop stock, the response was more crude and self-deprecating.
“don’t get me wrong it’s hilarious but it’s a government agency openly mocking people,” wrote one user.
One user replied: “you’re paying them to mock you.”
The video, posted on Tuesday, came a day before GameStop reported first quarter results. Prior GameStop and AMC earnings reports have helped sparked renewed interest in meme stocks.
GameStop shares were little moved in late trading on Wednesday following the company’s latest quarterly report.
Write to Connor Smith at [email protected]
