Wall Street Is Looking to Reddit for Investment Advice

Wall Street Is Looking to Reddit for Investment Advice

Wall Street professionals tell everyday investors what stocks to buy. But now they have to follow some of these amateurs for signs of where the market is headed next.

Venerable institutions Goldman Sachs Group Inc. and Morgan Stanley are tracking the retail trading frenzy, and hedge funds in New York and London have employees combing through the internet forum of Reddit, Twitter or chat startup Discord in search of trading opportunities. They turned to these sources following a period of market mayhem dominated by amateurs on Reddit’s WallStreetBets and the Robinhood Markets Inc. trading app who collectively boosted the shares of GameStop Corp. and other companies that had fallen out of Wall Street’s favor.

“It’s more art than science because it’s uncharted territory,” said Simeon Siegel, a BMO Capital Markets analyst who has spent his career covering retail companies.