If all of your favorite websites went down, where would you meetup with all of your online friends?
If you’re a Redditor who frequents r/WallStreetBets and owns some meme stocks — like GameStop or AMC — the answer is simple.
You meet in the comments section for the YouTube video of the 2012 viral pop-sensation “Gangnam Style” by South Korean singer Psy.
In the wee hours of Tuesday morning, some of the internet’s biggest websites went down. Sites like Amazon, CNN, Twitch, Spotify, The New York Times, Twitter, and Reddit were all knocked offline due to an issue with CDN provider, Fastly.
CDNs, or content delivery networks, help speed up and improve the performance of your favorite websites. All of your favorite high-traffic places online likely use a CDN, so when an issue arises it’s very noticeable, as it takes down a large portion of the internet.
While the Fastly outage only lasted about an hour, it was long enough for some people to start assuming the worst. It didn’t take long for Reddit users who own GameStop and AMC stock to begin speculating: The hedge funds were trying to stop their short squeeze goal.
So, with Reddit down, the apes (that’s what the meme stock-holding Redditors call themselves) set in motion their backup plan — to congregate in the comments section of “Gangnam Style” on YouTube.
The thinking behind this is that YouTube would never take down its second most popular video of all-time. The plan was allegedly set up back in March on the subreddit, and it appears today was the first time the plan was enacted. It also seems like the majority of Redditors just became aware of this plan today, after the site went down.
If you go to the YouTube page for the Psy song now, you’ll find dozens of r/WallStreetBets users in the comments section, chatting about meme stocks as if it was a Reddit thread or a Discord channel.
You might be saying to yourself…”Huh?” OK, it is bizarre, but here’s a little bit of a quick primer on what’s going on.
Remember at the beginning of this year when Gamestop, AMC, and other low-priced stocks spiked? It was all due to retail investors buying up shares and squeezing short sellers. Then remember when Robinhood, the popular stock trading app, halted trading of GameStop causing the stock to drop? Many Redditors believe that Citadel, the hedge fund and financial services company that executes the trades for Robinhood, played a role in that. Hedge funds, like Citadel, were losing so much money betting against the meme stocks, so many Reddit users have come to believe this was all done on purpose.
Fast forward to this month. The meme stocks are spiking again, and the situation is very similar to what happened in January. Many Redditors feel a short squeeze is imminent, as hedge funds rush to close their positions, which would cause the meme stocks to jump even higher.
With hedge funds, who are still shorting these stocks, standing to lose a significant amount of money, meme stock holders believe Citadel has once again stepped in to stop it from happening. The theory is this: If they took Reddit down, Citadel would create fear and uncertainty in the community, as they wouldn’t have each other to rely on for encouragement. Meme stockholders with “paper hands” – those who sell stocks too quickly before they reach maximum profit – will then sell, lowering the price of the stock and saving the hedge funds from a squeeze.
And why does anyone think that Citadel has the power to take down Reddit? Well, the hedge fund is a part-owner of the CDN service, Fastly. (For the record, they own just 0.2 percent of it.)
It’s all very much a conspiracy theory at this point, and there is no evidence that Citadel was involved in Tuesday’s outage. But that hasn’t stopped the comments section of a 2012 YouTube video from becoming the hottest place to discuss the stock market.
Oppa Gangnam Style.
UPDATE: June 22, 2021, 2:12 p.m. CDT We updated this post to clarify Citadel’s relationship to Fastly.