GameStop’s Reddit Revolution Echoes Occupy Wall Street Crusade
Angry, organized online and aiming straight at Wall Street’s elite institutions.
Nearly 10 years ago, that’s how the Occupy Wall Street movement burst onto the global stage. Its sit-ins, protests and demonstrations against inequality pushed “the 1%” into the popular lexicon.
This week, a squadron of irreverent, digitally oriented traders who gather in Reddit’s WallStreetBets forum once again took on the old guard. They forced two hedge funds to back down from wagers that GameStop Corp. shares would fall. The Reddit horde’s efforts sent the video-game retailer soaring — making millionaires out of some of them along the way, while inflicting major losses on the establishment.
In April, the stock traded at $2.80. On Wednesday, GameStop hit $380.
It was a campaign months in the making, yet this victory for the group — its leadership amorphous, its politics populist in tone yet ambiguous — drew parallels with the anti-establishment campaign that rattled the financial industry a decade before.
“What’s happening right now has sort of morphed into a movement,” said Austin Hou, a designer and engineer from San Francisco who has been reading WallStreetBets for about a year. “The strongest communities come out of necessity, and what we are seeing with this GameStop chaos is just an expression of that, where people have felt so alienated from an existing system.”
@AOC
Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino10:06 PM · Jan 27, 2021
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Like many during the Covid-19 pandemic, Hou downloaded Robinhood, a digital brokerage app that lets people trade stocks from their phones, and bought a few shares of GameStop. He views the community of Reddit posters as being fed up after seeing “two different worlds that are not getting closer. They are more different than they’ve ever been.”
To be sure, boosting GameStop isn’t going to bring down global capitalism. The movement’s goals are not the same as those of Occupy Wall Street. In fact, the Reddit horde’s actions haveadded billions to the wealth of some of the world’s ultra-rich. And financial advisers warn that for most people, the shares arejust too risky to buy at scale.
Still, the language floating around the forums sounds familiar to Rachel Meade, an instructor of political science at Boston University who studies populist movements.
“It feels very similar to Occupy Wall Street,” she said, also drawing comparisons to left-leaning populism that surrounds Bernie Sanders and Alexandria Ocasio-Cortez.
On the political left and right, a unifying theme of populism is the alleged hypocrisy of an elite treated differently from regular people.
“A Redditor is probably closer to the average citizen, and yet now they are using the stock market in a way that top hedge funders have long been using it,” Meade said. “It just hit all the right notes of that kind of hypocrisy and that moment of ‘Wow, we did it, we banded together and put these guys in their place.’”
Redditors are having their say from trading “floors” that look nothing like those on Wall Street. Nick Sweeting, a 24-year-old in Montreal, works at a desk that’s surrounded by a pegboard full of climbing gear, motorcycle wiring and lighting cords in his bedroom. As the market was opening Wednesday, Sweeting was monitoring his Robinhood account while making crepes, his phone propped up on top of the stove. Two minutes before the market opened, the app crashed and his crepes burned.
Sweeting has been a member of WallStreetBets for about two years but only began monitoring the group regularly in the past month. The self-taught software engineer, who dropped out of high school at 16, entered his first position in GameStop on Jan. 22, and has so far seen a 600% gain. While the main motivator behind the group’s effort was profits, Sweeting says it was also a morality play.
“These hedge funds went and tried to crush this company,” Sweeting said. “That’s why there’s a lot of popular support behind the WallStreetBets-style of attack on these hedge funds, because it’s sort of sticking it to the man,hedge fund against retail investor.”
Thomas Swann, a lecturer at Britain’s Loughborough University and author of a book about anarchist cybernetics, doesn’t see many anarchists, socialists or communists joining in soon. “This is beating some of these hedge funds at their own game,” he said. “A more radical critique would be to change the game entirely.”
But even if he doesn’t see a link between the two groups, Swann does believe that actions of the Reddit traders show some of the hallmarks of other protest movements. The Redditors picked a single target and acted in unison, rather than taking aim at the entire system. This is likely to bring about a short-term win, which gives the movement hope to continue acting and pressing for greater change.
“These sorts of small-scale impacts are important because they signal that the system is potentially vulnerable,” Swann said. “It clearly is an act of resistance, so however limited it might be, it could be part of something larger.”
Anger over the way a pandemic economy has enriched a small elite and supercharged the stock market is also strikingly similar to animosity toward the “Wall Street fat cat” after the 2008 financial crisis.
The Reddit army’s position is getting support from some iconoclasts in the investing world. “It’s a revolution that started with people not trusting central authority,” tweeted the billionaire Bitcoin investor Mike Novogratz. “It’s a call for transparency and fairness. In many ways its happening in parallel with the social unrest we see in our country.” Elon Musk chimed in, too.
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Gamestonk!!
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In 2020, the stock market soared despite the pandemic. However, such gains mostly go to the wealthiest 1%,who own more than 50% of the equity in corporations and in mutual fund shares in the U.S. Since peaking at 21.4% in 2002, upper middle class Americans have seen a 10 percentage point decline in their equity interest in companies.
The GameStop fans are facing plenty of scrutiny. The White House and the Securities and Exchange Commission are monitoring the situation. Senator Elizabeth Warren said she’ll make sure securities regulators “wake up and do their jobs.” WallStreetBets briefly stopped allowing new members.
Paolo Gerbaudo, who directs the Centre for Digital Culture at King’s College London, thinks this week’s events presage impending protest. During the pandemic, much of anti-establishment activity has come from the political right, with anti-mask and anti-vaccination movements. But Gerbaudo thinks that as countries exit lockdowns, the left will make a resurgence.
“Socioeconomic anger is only bound to increase,” he said. “Things were very unequal before the pandemic. They’ve become even more unequal now.”
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