“My barber made $28Gs on Robinhood,” my brother’s best friend texted me early Thursday morning. A minute later, I received another ping but this time from my brother. “Reddit took down Wall Street. David versus Goliath,” his text read. I was half asleep and trying to make sense of the various messages and phone calls I received from family and friends. Sitting in my pjs, I could kick myself for wasting my nights laughing along on subreddit threads like r/Childfree instead of spending my time on r/WallStreetBets, the latter of which describes itself as “like 4chan found a Bloomberg Terminal.” Honestly, the r/WallStreetBets forum never drew me in, due in no small part to the sheer number of homophobic comments, casual misogyny and overall culture of toxic masculinity. If its founder, Jaime Rogozinski, was kicked off by moderators he called “straight up white supremacists,” what hope was there for users like me?
But now I was hearing about r/WallStreetBets in the context of the unlikeliest stock: GameStop. Our readers may remember the video game retailer GameStop from the looting during the George Floyd Rebellion which was replayed over and over on TikTok and other social media platforms for our collective enjoyment. One video captured the satisfaction of looting GameStop, especially when its store managers give such little cash back to those trading in games. And it makes sense. The pandemic has particularly affected young workers given both their precarious position in the labor market and the sectors of the economy that were hit the hardest. Over half of young people have been forced to move back in with their parents, at the highest rate since the Great Depression. And for the past decade, GameStop along with other brick and mortar retailers, has also been suffering. The looting and fears of future civil unrest were the final nail on the coffin for GameStop, leading the company to shut down 100 of its stores. GameStop’s gradual decline was a perfect target for hedge funds betting on the demise of its stock, not unlike hyenas feeding off a dying carcass, and justifying their actions as part of the larger and necessary evolution of the capitalist market that rewards competition.
Yet, seemingly out of the blue, wealthy hedge fund managers were fighting a mob of amateur retail investors. What the hell happened?
In a nutshell, retail investors using the r/WallStreetBetts subreddit forum have sent the GameStop stock up by more than 14,300%. According to interviews conducted by the Guardian and The New York Times, GameStop retail investors range from a 25 year-old laid-off line cook in the Bronx to a 37-year-old evangelical pastor in California. They are regular Reddit users who spend a lot of time on these messaging boards sharing information about stocks. They figured out that if they all buy a stock and hold on to it, the option price will go up astronomically. On the most basic level, they mimickedWall Streeters who buy a shitload of stock when they want to increase its price, or who bet on a stock’s price to go down, a process called short-selling.
However, as soon as these ordinary people started to profit from it, they found out that the free-market is quite far from “a free for all” and is actually shaped by political and class interests. Robinhood, whose name is a nod to the highway robber who stole from the rich to give to the poor, and whose slogan “democratizing finance for all” draws on the ethos of Occupy Wall Street, did not take long to restrict purchases and trades and force people to liquidate their accounts at lower prices. As the hedge funds cracked down on the average at-home amateur retail traders, Reddit message boards lit up with defiant messages against the 1%: “When hedge funds and others loot our markets it’s all good,” read one “but when retail investors destroy a hedge fund, all of a sudden, analysts are calling for regulation.” The hedge fund backlash against the small time retail traders riled them up. Once they realized what their collective power on Reddit unleashed there was no going back—it was about sticking it to Wall Street, or “the 1%.” Their war against Wall Street seemed more important than making a few bucks. We are basically watching a Reddit version of the movie Fight Club, where ordinary people are embracing a growing cynical view of wealthy elites and scrambling for ways to fight against them.
While it is true that small time traders did make some money in the last few days, the real winners are the wealthier investors in GameStop — guys like Michael Burry, the real-life inspiration behind the book turned movie The Big Short. He made a 1,500% gain in just the last few days. Most small time retail traders are far from Burry; they are people stuck at home bored and on amateur share trading platforms like Robinhood trying to make some extra money to supplement their measly unemployment checks. They look to guys like Burry for the knowledge of learning how to trade. They include those like my brother and his friends, who are constantly looking for what they call “the edge,” the know-how that will lead to advantages in the market and, well, money. For a very long time, “the edge” was hidden from average people and was the purview of investors and analysts who were paid large sums of money to sharpen their skills of predicting which future stock to buy. Also buying stocks was more difficult. You had to pay for a trade. But today, platforms like Robinhood have done away with that. No fee trades have made buying and selling stocks more accessible. Amateur traders with no money to enlist professional help are spending a lot of time on Reddit forums like r/WallStreetBets and stock tweets to find their “edge.”
The pandemic also had a large part to do with it. Stock trading has become a fun game, especially when you are sitting home, bored and anxious about the present moment. Millions of people are permanently unemployed and are more willing than ever before to gamble their money in the hopes of striking it big. If you’re going broke anyway, why not take the risk? Also the stimulus checks gave everyone some extra cash and put some liquidity back into the market.
But the key ingredient is the subreddit forums which created online solidarity between people that social critics seek to put into neat categories of either “working-class” or “petit bourgeois.” In reality, decades of austerity made worse now by the global pandemic have created more common ground between these groups and they are finding each other in online forums, commiserating about their jobs and alienated lives and in this instance looking for a way to make some money. GameStop is the latest example of the class recomposition that has become evident with the rise of QAnon and the January 6th insurrection, drawing together working class folks, small business owners and freelance artists. How do we make sense of this weird coalition and what are its limits?
Recent analysis of GameStop focuses on the addictive features of gambling, the confirmation bias of online messaging forums and the boredom that young people are dealing with during the covid lockdowns. While these explanations have an element of truth to them, they see the rise of GameStop and QAnon as “freak outbursts,” a sort of new normal amid a global pandemic that is forcing us all online more often than we’d like to be. Instead, I would like to propose that we should take quite seriously how middle-class resentment politics dominate these fringe online cultures, including those that we would be more sympathetic to, like GameStop.
Today, the material advantages of a middle class lifestyle that Americans have been socialized to revere are in decline. And it’s not only middle class people that are resentful about this but also working class folks like my friends and family members who no longer see any viable path to the middle class. “I came to America for opportunities, not to grow old and poor,” my mom’s neighbor, a Mexican woman in her 50s often says. This resentment is uniting working class and petit bourgeois elements. As a result, we have seen all kinds of conspiratorial explanations to make sense of growing inequality and alienation, from the “Chinese virus” as a form of bioterrorism to secure its position in the world economy all the way to the deep state support for a vast pedophile ring led by Democratic elites.
On the surface, GameStop does not appear to be about middle class resentment. It confirms people’s anti-establishment views that the game is rigged and at the bare minimum allows for people to collectively vent and make fun of the very wealthy. It is surely a politicizing moment. Hundreds of memes have gone up in the past few days that capture the sheer joy of roasting the very wealthy. One meme I shared on my social media: “Millennials will continue killing one company a day until we get $2K a month” captured the sentiment that is fueling the GameStop phenomena. The American government has done nothing to financially assist ordinary Americans and instead Congress people have tried to outbid each other on how low they can go on the Covid relief bill. Complete state abandonment, coupled with an otherwise healthy stock market that continues to make people rich amid a raging pandemic that has claimed over 400K lives, makes you want to scream! It is especially heartbreaking to witness Amazon workers risking their lives for a low wage job while Jeff Bezos is raking in the profits and being crowned the richest man on earth. As Amazon workers celebrate a $15 per hour victory, Bezos’s net worth climbs to nearly double that of Bill Gates, Mark Zuckerberg and Elon Musk combined.
GameStop participants constantly discuss their disillusionment with Wall Street using the language of “rigged game” and “1%” which harkens back to the Occupy movement. “When you lose it is okay but when they lose, it’s turned off,” someone tweeted in response to platforms restricting GameStop traders. The rigged game was further exposed when massive hedge funds like Melvin Capital required bailouts to stay in business as a result of the actions of Redditors. Ironically, Citadel Securities, one of Robinhood’s largest customers, was behind the bailout.
Even amid the fears of losing all their money, so many Redditors seem more concerned with demonstrating the rigged game than they are about their profits. For instance, a 37-year old store manager from Pittsburgh, USA joined in on the fun after his co-workers hyped it up. “I did some research and immediately knew that I wanted to put my money in, make big gains, and watch the rich cry into their $5,000 suits.” When GameStop trading was halted by many platforms, a 33-year old solicitor from Manchester told The Guardian: “This would appear to suggest the game is rigged for the benefit of the hedge funds. My 45 shares are currently dropping in value, so we shall see where they end up in a few days. I’m not selling.”
Another 23-year-old at London University quipped: “We all joined in, not just because of the money but because we wanted to send a message to Wall Street to tell them it’s not OK for you to make money through the destruction of companies, jobs and the economy…. “People have not forgiven nor forgotten what happened in 08. It’s not about the money. It’s about sending a message.” Reading all the online tweets of angry millennial small time investors, I kept asking myself: what is the message? To expose the greedy hedge fund managers and to better incorporate the little guys into the system in the near future? Or to destroy the system altogether? But what then?
When I think of my brother and his friends and countless others rejoicing in the defeat of the Wall Street Goliath, I see young people that are ultimately looking for an “in” even as the ground is crumbling underneath them. Their only chance is to literally gamble their stimulus checks and unemployment benefits online, not unlike their parents and grandparents previously did in casinos only to find out the house always wins. They spend their days scouring Reddit forums and trying to catch up to the Wall Street sharks only to find themselves in dangerous waters, without a lifeboat in sight. Incorporation into a crappy system or its destruction are the two choices we are presented with by the GameStop phenomena. But is online cynicism activism adequate for the kind of working class power we need to build that can defeat not only the bloodthirsty hedge fund managers but the state power that holds it all together? I think, more than anything, that these are the kinds of questions we should be asking ourselves.
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