The r/WallStreetBets server had initiated the mass buying of GameStop and several other targeted stocks, thwarting bigger investors who were short selling the stocks and caused staggering losses for hedge funds.
The subreddit feed was locked down and hidden, then made public again an hour later but Discord permanently banned WallStreetBets. This resulted in GameStop and AMC stocks, the two primary targets of r/WallStreetBets, dropping drastically in after-hours trading.
Tesla CEO Elon Musk, who helped bring attention to stock drama, tweeted his displeasure with Discord late Wednesday.
Small time investors called 'retail' traders, who use apps like Robin Hood, typically for smaller sums of money, worked together on social media to counter traditional Wall Street investors who bet on GameStop, AMC and other stocks dropping. Instead, Wall Street investors are hemorrhaging billions of dollars as the retails traders have driven up the prices on the stocks.
Following the Discord ban and the Reddit threads being locked down, GameStop shares fell 32 percent in after-hours trading, after having doubled during day trading.
AMC shares dropped more than 40 percent, a stock that had gained more than 301 percent during the day.
Discord claimed the ban had nothing to do with the trading but rather content posted by the users of the thread. "Today, we decided to remove the server and its owner from Discord for continuing to allow hateful and discriminatory content after repeated warnings."
Despite the stock gains, the struggling companies are still having solvency issues. Movie theater chain AMC, even faced bankruptcy due to coronavirus closures. GameStop is looking to pivot to a new model, as gamers migrate away from disc media to online gaming.