Redditors rip SEC over video targeting ‘meme stock’ investors

The SEC’s attempt to inform the public about the potential pitfalls of investing in so-called “meme stocks” infuriated some Redditors this week – with users on “WallStreetBets” and other boards grumbling that the agency was hypocritical and out of touch.

The SEC’s 30-second video titled “Meme Stocks” features a comedic sketch based on a fictional game show. A contestant attempts to invest in meme stocks, only for their money to disappear and a pie to hit them in the face.

Another contestant says they’re “going to do some research first” before investing – prompting the first contestant to ask, “We can do research?”

The video, which has been viewed nearly 200,000 times on YouTube, sparked a series of Reddit posts on WallStreetBets, a popular board for retail investors, and SuperStonk, a site focused on one of the original “meme stocks,” GameStop.

“Whoever made that video or decision to post deserves to be fired. The thought process behind that is out of this world in their thinking, if not blatantly spotlighting government corruption,” WallStreetBets user Thorbeans wrote in a post titled “A Message to the SEC.”

“The whole entire market is a meme stock, to label small-mid cap stocks as meme stocks is manipulation in itself through fomentation,” the post added.

“The SEC video makes me want to double down on MEME stonks,” another user on the WallStreetBets Reddit board wrote.

A third wrote: “There’s literally no chance this BS video will result in LESS memestock [sic] trading. Likely will result in more just to spite them.”

The SEC’s “meme stocks” video was the latest entry in its “Investomania” video series. The agency said the series of public service videos use a “game show concept to educate investors in a playful way that investing is not a game and that they should do their due diligence when making investment decisions.”

Previous editions of the series include videos on cryptocurrencies, margin investing and one entitled “easy money.”

The SEC did not immediately return a request for comment on the Reddit threads.

Barron’s was first to report on the backlash.

Meme stocks such as GameStop and AMC surged during the COVID-19 pandemic but have plunged recent days during a downturn in the broader market.

A recent analysis by Morgan Stanley found that retail traders have, on average, lost all of their gains achieved since 2020. Another study by Goldman Sachs showed nearly identical results.

Cryptocurrencies have been under similar pressure, plummeting from pandemic-era highs and draining the reserves of some retail investors who made bets on digital tokens.