Jaime Rogozinski, WallStreetBets Founder, Says Investors Are 'Outplaying' Hedge Funds

Upstart investors collectively buying shares are "outplaying" professional Wall Street fund managers, the founder of the r/WallStreetBets Reddit community has said.

Analysts say private investors armed with free-trading apps are using the Reddit forum to coordinate a stock market tussle with the professionals.

These so-called Reddit bros rallied small-dollar investors to buy shares in video game retailer GameStop, driving up the company's stock price in defiance of hedge fund managers who are betting against the company.

The WallStreetBets founder Jaime Rogozinski has said he finds an "element of satisfaction" in the saga, which has been compared to the Occupy Wall Street movement that began in 2011 with protests over corporate greed.

Asked about the comparison on TMZ Live on Wednesday, Rogozinski said: "It did kind of give you the feeling that they are taking a different approach to Occupy Wall Street. Instead of trying to beat them, they've joined them and they've done it effectively.

"Previously if you wanted to have a seat at the biggest poker table in the world on Wall Street, you needed to work with one of these large funds, or one of these big names.

It seems Occupy Wall Street had the wrong approach.

— WallStreetBets (@wallstreetbets) January 26, 2021

"And if you wanted to just play from home on your own, you'd be not even a grain on the sand. But what we're seeing now is this collective mass, where they are organized in a way that they have forced their way into this poker table and they're effectively outplaying some of these big players, which is just fascinating to watch.

"There's certainly an element of satisfaction in the way that people are taking control of what they want to do and they're doing it in a way that's fun."

Founder of r/wallstreetbets Jaime Rogozinski stopped by @TMZLive to talk about his groundbreaking online community that is taking Wall Street by storm!! Check your local listings for showtimes pic.twitter.com/9K19gIl7Vv

— TMZ (@TMZ) January 28, 2021

The Reddit group was designed to be a "place for people to talk about high-risk trade in an unapologetic way,"Rogozinski said, adding that its growth had been "nothing short of amazing."

Small investors on the forum have been joined in their scuffle with Wall Street by some incredibly wealthy people, including Tesla chief executive Elon Musk.

"Elon Musk is an absolutely wonderful CEO, I think that part of the reason that he's also been a subject of these so-called meme-spots is because of his personality and his ability to be able to be vocal on Twitter without a filter," Rogozinski said.

"It certainly is up his alley in terms of what's taking place right now. He's not a fan of the establishment. He's had his own issues with the establishment and I think he likes to see these stories where the little guys end up on top, so I think it was wonderful to see his support."

Musk has had run-ins with hedge funds betting against his company in the past. The disputes led to him striking a deal with the U.S. Securities and Exchange Commission over topics he cannot tweet about.

Stockbrokers are now calling for regulators to take action over what they allege is "market manipulation" of GameStop shares. On Wednesday, White House press secretary Jen Psaki said the government was "monitoring" the situation.

WallStreetBets was temporarily blocked by messaging platform Discord on Wednesday, while overrun moderators also took down the group themselves briefly.

'Nobody's lying or making any excuses'

Asked whether there was anything illegal about the Reddit bros mass action, Rogozinski said he was no legal expert. He suggested the group could find safety in numbers, adding that he would be concerned if he still moderated the forum.

"I can't answer that. I'm not an expert. But they usually need to go after a person.

"This is a group of people that are collectively deciding to buy stock, nobody's lying or making any excuses to why. If I were still a moderator on WallStreetBets, I'd probably be concerned if I was personally involved in some of these trades."

Asked if casino bouncers removing card-counters were comparable to regulators trying to take action against Reddit bros, he said: "That's an excellent analogy because they're actually able to influence the outcome of the bet.

"If you're trying to bet on sports or horse races, whatever, you can do this type of thing without any problem. The people who are betting don't have any influence on the outcome. That's not quite the same here."

GameStop shares were valued at $347.51, a daily rise of almost 135 percent, at market close on Wednesday. All eyes will be on their value when the NYSE opens at 9.30 a.m. on Thursday.

Fearless Girl sculpture near NYSE
The Fearless Girl sculpture by Kristen Visbal outside the New York Stock Exchange. Small private investors helped send GameStop shares soaring on Wednesday, in defiance of some hedge fund managers. TIMOTHY A. CLARY/AFP/Getty