Skip to main content

Internet communities disrupt Wall Street

by Ivana Gazibara, Feb 4
1 minute read

In January, a large number of members of a Reddit community called wallstreetbets bought shares in GameStop, an American gaming retailer that wasn’t doing all that well in the midst of the pandemic. Because of this, a large number of hedge funds shorted the company. But when the Reddit community bought a large number of shares, this sent the stock price of GameStop soaring and led to huge losses for the hedge funds involved.

girl statue

So what?

The implications of this are still unclear. For many in the Reddit community, it was a joke. But there were other users who called the move revenge against the big companies they saw as responsible for the 2008 crash. One thing is certain – the move demonstrated the potential power of online communities to disrupt the market. As the noise around the unfairness of today’s economic model grows, could we see more such market disruptions by the masses?

Sources

Details

by Ivana Gazibara Spotted 3 signals

Have you spotted a signal of change?

Register to receive the latest from the Futures Centre.
Sign up

  • 1
  • 1
  • Share

Join discussion

  • CH Charlie Thorneycroft says:

    One aspect that emerged in some of the media coverage is just how sophisticated a few of these Redditors were in their analysis of the structure and functioning of equity markets. Clearly, some of these anonymous contributors were professional traders.

    While on the one hand, the short-squeeze was organised entirely transparently, in full view of the public and regulators. On the other we know very little about these contributors and their motivations. Were they trying to manipulate the WSB community for their own personal gain, or were they using the tools of financial engineering to undermine the very system that produced them?

    To me, this question signals the potential for a new form of direct action led by financial professionals disenchanted by the effects of our financialised form of modern Capitalism.

  • Related signals

    Our use of cookies

    We use necessary cookies to make our site work. We'd also like to set optional analytics cookies to help us improve it. We won't set optional cookies unless you enable them. Using this tool will set a cookie on your device to remember your preferences.

    For more detailed information about the cookies we use, see our Cookies page.

    Necessary cookies

    Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

    Analytics cookies

    We'd like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our 'Cookies page'.

    >