Last month, I was reporting a story on data providers’ willingness (or lack thereof) to provide insights around meme stocks, which to name a few, include GameStop, AMC, Nokia, Blackberry, and Bed, Bath & Beyond.

To recap, some vendors like Thinknum and InsiderScore are diving into the craze headfirst, tailoring bespoke solutions to their clients’ questions and adding out-of-the-box components to their product lines. Others, such as Nasdaq-owned Quandl, are cautiously experimenting, while others are sitting out the phenomenon, as the Securities Exchange Commission continues to investigate the trading of GameStop’s shares—and perhaps will opt to regulate—day trading apps like Robinhood and controversial topics like payment for order flow.

While I was reporting, I spoke to the co-founder and CEO of a retail-oriented data provider, who I decided not to include in the aforementioned story. As we talked, I had noticed that some of the words and phrases they used reminded me of those espoused by believers in QAnon, the cult that was, in part, responsible for the violence that unfolded at the US Capitol on January 6, the day on which Congress met to certify the Electoral College results of the 2020 presidential election.

So I did a little digging. In minutes, I found the CEO’s (public) Instagram account, which, peppered between otherwise lovely photos of his family on vacations to ski slopes and tropical resorts, are hundreds of memes that run the gamut of conspiracy theories—that the Covid-19 vaccine causes deformity and retardation; that China unleashed the disease intentionally upon the rest of the world; that Michelle Obama didn’t give birth to her children (?); that Hollywood and government elites are Satanic pedophiles; and, of course, a handful of screenshots of posts written by Q, the anonymous leader of the QAnon movement, pulled directly from vitriolic internet forum 8kun. Indeed, it was a deathly cocktail of hatred and bad faith, with a sugary rim.

Despite our conversation having been on the record—and indeed, they told me several times, “you should quote me on this”—I’ve decided to keep them anonymous here because the point of this column isn’t the person’s identity, but to illustrate the routes by which disinformation quietly travels—even to you, inhabitant of the maybe-sometimes-a-little-boring world of financial technology and data. But for context, I’ll reveal that the company they lead is reasonably established, having launched in 2003, and claims about 10,000 paid subscribers in 65 countries, most of whom are “self-directed, individual investors.” They added that the company used to have some major financial clients, and that E*Trade and Scottrade (now TD Ameritrade) both formerly licensed the vendor’s data, which I confirmed through some further sleuthing.

A central point of the two meme stock/GameStop stories (here is the other one) I’ve written so far has been that data providers that use advanced technologies like machine learning and natural language processing to trawl social media and gauge online consumer sentiment are ill equipped to understand where meme stock sentiment and signals come from—Reddit—and what they mean.

Reddit, I’d argue, is fundamentally and profoundly dissimilar to other social media giants like Twitter, Facebook, and Instagram, in that the 52 million daily active users and 100,000 communities that make up the site are also made up of a blend of other beasts—namely those internet bogeymen, the chans and the kuns, and it houses a watered-down personality of those websites.

For one example, a meme known as Pepe the Frog—an anthropomorphic frog with many variations, and many of which I found on this person’s Instagram feed—originated in a 2005 comic strip, but grew to mainstream popularity through the likes of 4chan, Tumblr, and Reddit, before it devolved into a symbol of the alt-right and white nationalism, and the Anti-Defamation League added it to its list of general hate symbols. Reddit has not banned the image from its platform. It did, however, ban a popular subreddit, r/TheDonald, last summer, as part of an overhaul of its (lightly enforced) hate speech policies. The New York Times reported that “The Donald” had been home to 790,000 users who posted memes, viral videos, and support for then-president Donald Trump. Though the Times story doesn’t mention the word “QAnon”, the subreddit fostered a safe haven for conspiracy believers to gather, grow, and organize.

Reddit also conscripts an army of moderators known as its “Anti-Evil Operations Team,” to flag and remove abusive content and combat false information. The AEOT was cited by Reddit CEO Steve Huffman as an example of the site’s efforts against disinformation and harmful behavior during the first Congressional hearing on the GameStop debacle, held on February 18.

“Reddit’s moderation system starts with our content policy—the platform-wide rules, which all communities must follow. Among other things, these rules prohibit hate, harassment, bullying, and illegal activity on Reddit. And they are enforced by Reddit’s Anti-Evil team, which is composed of engineers, data scientists, and other specialists,” Huffman said in his testimony.

However, little information is readily available on the AEOT, such as when it was formed or how many moderators (including whether it consists of paid employees versus volunteers) make up the team—though an Irish Times article from 2019 claimed that the company was poised to add 25 Dublin-based positions, one of which was to be an “Anti-Evil specialist.” Indeed, a simple Google search of “Anti-Evil Reddit” offers up several threads from the subreddit r/ModSupport—“an official community to provide a point of contact for moderators to discuss issues with Reddit admins, mostly related to mod[eration] tools”—in which community moderators themselves are not quite sure what it is or how it works.

How well the AEOT works is altogether a different question, too. In addition to allowing the roots of QAnon to snake around the website unfettered for years, Gabriel Plotkin, CEO of Melvin Capital—a target and casualty of the GameStop short squeeze—testified that Reddit posts encouraging users to trade in the opposite direction of Melvin’s holdings were “laced with anti-Semitic slurs directed at [him] and others.”

Plotkin said one post in particular read: “It’s very clear we need a second Holocaust. The Jews can’t keep getting away with this.” Reddit’s Huffman said that the AEOT searched “high and low” for that comment but did not find that exact wording anywhere on the site. He did say they found a single comment—the contents of which he didn’t offer, but was presumably similar in sentiment—that received zero votes and was deleted within five minutes.

Additionally, in April of this year, a plaintiff under the pseudonym Jane Doe filed a class action lawsuit against Reddit, alleging that the site knowingly benefits from the posting and circulation of child pornography on its site. To be sure, Reddit did not ban this type of content until 2011, which the lawsuit claims it did so “begrudgingly.”

The too long; didn’t read of it all is that an “Anti-Evil team” of unknown size, make-up, and resource is responsible for the moderation of 52 million users and 100,000 communities, each with their own unique community guidelines and even language, and is tasked with eliminating things like disinformation, racism, anti-Semitism, homophobia, bullying, child porn distribution, and spam. I’m not convinced it’s working.

Allow me to note a final, but important, mark of distinction for Reddit: anonymity. While it’s easy to make a burner Twitter account, they don’t typically have a lot of sway on the site—the blue checkmark is a kingmaker, and the algorithm is much more inclined to serve you up a viral tweet than a nothingburger. Facebook, of course, has its own fakes, but both a name and photo are required for any account. On Reddit, the burner is the norm, and truly anonymous users are often the most influential.

Just look at GameStop.

It was just Keith Gill, a 34-year-old father and certified financial analyst based in Massachusetts, who catapulted GameStop’s stock from $4 to nearly $500 in January. But he didn’t do it as himself. Instead, under the name “DeepFuckingValue” on Reddit and “RoaringKitty” on YouTube, Gill amassed an army of anonymous cohorts. In the process, he essentially broke the stock market with a fundamentally worthless stock in the same manner that a mega-celebrity like Kim Kardashian could break the internet.

Taking all of this into consideration—and I have barely scratched the surface of Reddit’s role in QAnon, GameStop, and disinformation more broadly—I have to ask the data providers jumping on the meme stock bandwagon: Are you responsible enough to provide any sort of data or investment insight and analysis on meme stocks, and thereby, Reddit? Are you prepared to consider Reddit a shiny new needle in the haystack that is the overcrowded world of alternative data, in the way that you consider Amazon reviews, Twitter comments, and Facebook posts as sources of alpha-driving sentiment? Are you willing to consider darker corners of the web? And where will you draw your uncrossable red line? Do you even have one—even if it comes at the expense of a huge pay-off, or maybe worse, a glaring risk?

Which brings me back to the conversation I alluded to at the beginning of this column, because the person I spoke to may well be the most qualified data provider to answer those questions. I say that because, when I asked how their company’s models could or would handle all the lingo and nuance of Reddit, he told me Reddit was almost too easy; in fact, the models already follow the lingo and nuance—and those are the most generous of terms I can use here—of 4 chan, 8chan, and 8kun.

“You have to be aware of all of that stuff, so we’ve been on that since 2017,” they said. Indeed, Q’s first post arrived on 4chan in October 2017.

“We’re way ahead of the game. So in fact, Reddit to us is just a tiny subset of that type of language. … Reddit is a little bit there, but remember Reddit is still monitored, and it’s not free speech whereas those places—and especially 8kun—I mean, you need some thick skin to be able to go through that because you’ve got counterparty players that are trying to dissuade you from being there. You need to know how to filter the data and understand what is meant. And some terms that people find just grotesque are actually not grotesque at all. It’s part of the language.”

Which brings me to one last point: If you are an institutional asset manager overseeing, for example, a massive pension fund, are you comfortable incorporating data from vendors that pull in “sentiment” from the chans and the kuns—sites that are helping to sow discord in this country and undermine truth? Are you happy to invest in hedge funds that web-scrape these sites to drive investment ideas? You might think it’s a ridiculous question, but it would’ve seemed ridiculous just a year ago to think that Reddit would be the best driver of stock market sentiment, no?

So here we are. I write for a remarkably niche publication that covers capital markets financial technology, and I can’t escape the rise of disinformation. You are reading this, and either you already know or are surprised to find that coordinated disinfo campaigns are hovering in your periphery, waiting to benignly introduce itself to you. You might be forced to meet it, which is fine. What matters is whether you recognize it.