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Emotions and stock returns during the GameStop bubble

Author

Listed:
  • Adrian Fernandez‐Perez
  • Ivan Indriawan
  • Marta Khomyn

Abstract

We examine the relationship between investors’ emotions and GameStop (GME) stock returns during the price bubble of January–February 2021. Analyzing eight basic emotions (anger, anticipation, disgust, fear, joy, sadness, surprise, and trust) from Plutchik's (1980) Wheel of Emotions, we use textual analysis of Reddit posts to find that fear strongly predicts intraday returns and volume order imbalance. The predictive relationship between emotion and returns shifts over time: joy is strongest before the bubble peaks, fear at the peak, and anger after the bubble bursts. These findings highlight the psychological factors influencing trading behavior during stock market bubbles.

Suggested Citation

  • Adrian Fernandez‐Perez & Ivan Indriawan & Marta Khomyn, 2025. "Emotions and stock returns during the GameStop bubble," The Financial Review, Eastern Finance Association, vol. 60(3), pages 1063-1084, August.
    • Handle: RePEc:bla:finrev:v:60:y:2025:i:3:p:1063-1084
    DOI: 10.1111/fire.12438
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    References listed on IDEAS

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