Home Commentary GameStock: the digital revolt of the Third Estate

GameStock: the digital revolt of the Third Estate

by Elyette Levy February 12, 2021
GameStock: the digital revolt of the Third Estate

What are we investing in next?

Scrap New Year’s resolutions, I’m starting a new February resolution: getting financial advice from r/WallStreetBets.

By now I’m sure you’ve heard the havoc that Redditors have wreaked on the fortune of some hedge fund owners over the past week. The David and Goliath metaphor has been frequently used to describe small investors’ move to purchase GameStop (GME) stocks in hopes of taking down companies like Melvin Capital, who has lost $4.5 billion since the beginning of the month.

There has been pushback on both sides, with some saying this is just more evidence that short selling should be considered illegal, while others think rallying hordes of people to pump up the price of a stock should be considered ‘market manipulation’, which is already illegal.

What stands out to me the most in this whole fiasco is the sheer magnitude of what a group of people were able to accomplish with just their phones and a good Wi-Fi connection. 

We’re at a point in the digital era where internet users are understanding the power of public forums. Instead of being used for just individual support, these platforms are now able to reach and rally enough people to topple billion dollar hedge funds.

The internet is still in its stage of infancy; it’s still new to the world and has only recently become understood as a powerful voice for the common people. The Arab Spring in the early 2010s showed how social media could be used to carry and spread a political message more effectively than ever before.

And beyond being used as a way to round up support for a political cause, more and more people are making various types of media primary didactic tools. Recently, platforms like TikTok and Reddit have increasingly shifted into a go-to place for expert advice about anything, from legal counseling to, well, stock market investment advice.

We’ve first used the internet as a way to fast-track globalization, in connecting people from all over the world. Now that this concept is firmly anchored into our lives, online spaces are transforming into democratizing tools. 

We’re seeing a growing focus on bringing people’s strengths together to overcome others’ weaknesses and empower the ‘small guys’. The phrase “Twitter/TikTok, do your thing” to bring attention to an issue or a cause has become common on both platforms.

The soaring stock prices brought along by Redditors is more evidence of an internet revolution. Individuals mobilizing to take down Goliath-like organizations is nothing new, but it’s never been so easy to find advocates for a cause, let alone to incite action on it.

GameStop investors have begun chasing after other stocks targeted by short sellers, now attempting to short squeeze the silver trade. 

This has never happened before. Economists are uncertain what happens after a takeover like this, all possible outcomes for hedge funds and shareholders are hypothetical. But inspired by the principle behind what we’ve seen with GME, I predict more such gatherings are going to take place throughout 2021.

In the meantime, you can catch me scrolling through my newly downloaded Reddit app seeking stock symbols to invest in next.



Graphic by Taylor Reddam.

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