Reddit went down on Wednesday afternoon, with its status page showing a major outage for several areas, including parts of New York City.
Trying to load the site itself results in nothing but a blank tab.
Reddit went down: why is GameStop stock rising?
Coincidentally or not, the site appears to have failed after GameStop Stock surged by 100% in later hours of trading. The controversial r/WallStreetBets community has organized to raise the stock before, and was intensely active following the surge.
But for now, it's not clear if the two are related — however the r/WallStreetBets subreddit was seeing major traffic just before the site failed.
Identified: We've identified the underlying issue and systems are beginning to recover. https://t.co/6kaZin2L0u— reddit status (@redditstatus) February 24, 2021
Reddit had tweeted the issue was identified, and was starting to recover its functionality. The site has started working for Interesting Engineering staff in New York, but other areas could still be down.
Reddit recovers 'healthy' operation
A follow-up tweet from Reddit stated they had "observed a recovery," and that the website's "systems are healthy."
"Reddit is operational again," read the tweet.
This strange coincidence came on the heels of GameStop CFO Jim Bell's imminent departure from the company — and the company's stock price maintained a mostly unchanged position throughout Wednesday, Feb. 24. But before market close, GameStop's stock rose from the mid-$40 range to nearly $92 — an increase of roughly 100%.
Astoundingly, GameStop's stock price rose even more after trading, hitting a high of $180 before falling to $91.71 as of writing. Other stocks selected by the r/WallStreetBets subreddit like AMC also saw a spike at the end of the market day.
Reddit going down while GME and AMC surge could be a coincidence — and just to be clear it was the entire Reddit site, not only the subreddit — but the sudden influx of traffic from Reddit users looking for tips could be to blame for the Reddit hiccup — as numerous celebratory posts showed up on the subreddit in reaction to the share price jump.
GameStop struggled to compete with software games and online retailers like Amazon
During much of Bell's tenure at Reddit, GameStop was undergoing a major transformation plan in its struggle to compete with the overwhelming dominance of software game sales and major online retailers like Amazon.
The company experienced a boost when the latest generation of new consoles was released, but the increasing emphasis on diskless consoles left traditional game retailers in dire straits. As of writing, the company has closed hundreds of stores, and has plans for more serious changes on the horizon — with the e-commerce investor Ryan Cohen recently admitted to GameStop's board of directors.
We can't draw a solid connection between Reddit's site failure on Wednesday and the sudden 100% spike of GameStop stock price. But it remains to be seen whether the saga of r/WallStreetBets is starting up again, or if this will become the final phase.
This was a breaking story and was regularly updated as new information became available.