American Consequences contributingwriter Alice Lloyd sat downwith some of the many involved in the recent GameStop short phenomenon to get to the heart of this newgeneration of traders...
CLICK HERE TO READ THE WEB VERSION
E veryone wants a handle on the short squeeze movement, a new chapter in the so-called gamification of trading. The effectively organized (but motley-in- spirit) mob manipulation of a sentimentally meaningful “meme stock” – storefront game retailer GameStop, beloved by all who grew up on video games – grabbed the world’s attention in late January. Small investors on WallStreetBets, an online forum focused on high-risk trades within the social media site Reddit, banded together and drove up the value of the store’s heavily-shorted stock, buying up shares and triggering a rush to buy more shares – at a big, fat, glorious loss for all those short- selling, fleece-vested, Fairfield-County-dwelling hedgies who never saw it coming. Reddit, for the uninitiated, is a shadow world unto itself. I’ve heard it described as “Instagram for ugly people” or “Facebook for indoor kids.” Every esoteric and ordinary interest is represented there in some forum or other, but it’s perhaps more characteristically home to endless discussions of video games – and host to bottomless conspiracy theorizing. Its communal sensibility runs deeper than other comparable social media sites – users are often, though not always, anonymous – and posts within the site’s many various
subforums gain votes and rise to the top of the page as they do, based on the quality of their insight or how well their tone fits the subforums’ idiosyncratic humor. In essence, a few influential users on WallStreetBets didn’t like the short selling of GameStop, and they decided to profit – slamming the shorts, and driving the price up – at the expense of those rooting against it. WALL STREET FOLK HEROES This is a story that begs to be mythologized... It’s not for nothing that the leading retail investing app Redditors use is called Robinhood. That’s Robinhood, as in Robin Hood, as in the anti-capitalist folk hero who stalked late-medieval Nottinghamshire armed with a bow, arrow, and silly hat... robbing the rich and redistributing their wealth to the poor. Reddit, for the uninitiated, is a shadow world unto itself. I’ve heard it described as “Instagram for ugly people” or “Facebook for indoor kids.”
American Consequences
39
Made with FlippingBook - professional solution for displaying marketing and sales documents online