GameStonks as Remix

Amidst a global pandemic and financial crisis, users of a sub-reddit called Wall Street Bets were able to challenge the power of the Wall Street establishment using technology that was readily available to them and strategies that were perviously reserved for groups with vast amounts of capital. The ethos of the movement is reminiscent of instances of hacktivism that have occurred in the last two decades like The Arab Spring, Occupy Wall Street, Anonymous, and Wikileaks. The groups spirit of trolling, meme-ing, and griefing made this a playful act of resistance but also one that left billionaire hedge-fund managers shaking in their bespoke suits.

The Reddit forum r/WallStreetBets (WSB) is a popular online community for amateur stock traders to share information about the market and provide advice on trades to other users. Currently the forum has 9.4 million members, to which they refer to themselves as “degenerates.” In 2020 a user of this forum with the screen name u/DeepFuckingValue (DFV) realized that large hedge-funds were putting short options on many companies that were on their way towards bankruptcy and had been hit extra hard due to the pandemic. A short option is essentially when a person or an entity like a hedge-fund uses their vast amount of resources to bet that a stock price is going to go down rather than up. This lucrative trading strategy of betting on a business to fail is completely legal but seen as distasteful by many in the financial world (Jarrow, 1992). The user DFV did some more research on what these companies were doing and found that a hedge fund called Melvin Capital had a short position on the brick and mortar retailer GameStop that allowed them to make a bet on 120% of the available shares (Davies, 2021). DFV shared his findings with the WSB forum and the users crafted a strategy to try and take on this billion dollar hedge fund. In a traditional investment setting when you put money in a stock at a certain price, the biggest risk you have is that the stock goes to $0.00. In the case of short selling, when you have bet that the stock price is going to decrease, if that stock goes up instead, there is an unlimited threshold of what you can lose (Davies, 2021). The goal of WSB was to drive the stock price of GameStop up, so that when Melvin capitals short options were called, they would be forced to buy the stock at a higher price. This would cause them to lose billions of dollars.

Upon further research users of WSB found that it was not just Melvin Capital doing this to GameStop, but other hedge-funds were also making these bets against companies like AMC Theatres, Black Berry, Nokia, and Blockbuster (Hern, 2021). To the users of WSB who appear to mostly be males born in the 80s and 90s, steeped in video game and internet culture, this was an attack on the companies they held dear from their childhood. Amidst a global pandemic and financial crisis these companies were reminiscent of the early 2000s, a happier time for some. These companies were hurt in the 2008 financial crisis, are victims of the growing power of big tech, and were already going under due to the dematerialization and digitization of media. To WSB it was rather obvious these were not going to be good performing stocks to put their money into, but saw these hedge funds as kicking a horse while it was down. The users referred to them as “Meme Stocks” and began getting to work, mobilizing other users to start buying up shares.

The community of WSB itself is akin to a chat room like 4chan, users are largely uncensored, love to troll, are always sharing memes, and have their own way of speaking. The culture that exists on this forum is not something that would be acceptable in polite society. The forum has its own dictionary of words and slang that are used in discussion. The most used is the reference to stocks as “stonks”, when calling a stock a stonk it implies that this stock can only go up. Some other notable terms are “diamond hands”: a person is said to have diamond hands if they bought a stock and are holding onto it regardless if the price goes down. “Paper hands” is the opposite, being a person that buys a stock then sells out of fear once the price going down. Another term they use is “tendies”, users joke that all they want to do is make profit off stonks so that they can buy more chicken tenders from McDonalds (r/wallstreetbets — Basic Guide to Wallstreetbets Culture for Newcomers).

Richard Dawkins came up with the term meme in 1976 describing it as “gene-like infectious units of culture that spread from person to person”(Shiffman, 2013). Posters often recreate memes from pop culture and remix the content to suit their inside jokes about financial advice that they will disclaim is not financial advice. But the biggest meme of WSB is the meme stocks. Once users had identified companies like GameStop and AMC as meme stocks, or meme stonks to be correct, the enthusiasm of purchasing these stocks infectiously spread through the forum and into the real world. WSB users reference the pop culture term of YOLO made popular by Drake, meaning you only live once, and applied this mentality to buying stocks. A rationale was formed that if you lost money on buying these stocks then whatever, you only live once.

The prices of these stocks began to go up drastically and gained international attention, mainly scorn from hedge-fund managers who leveraged their connections to get on primetime television and denounce what was happening. The hedge-fund managers argued that what people on WSB were doing was not right and that they were treating the stock market like a casino. Politicians like Alexandria Ocasio-Cortez came to the defence of WSB in a tweet stating “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 casino” (Panetta, 2021). Where as large hedge-funds can use their vast amount of capital to coordinate the purchase of stocks to drive the prices up or down. Users of WSB did the same thing but instead of using large amounts of capital they crowd sourced and coordinated a large amount of people with ranging sizes of resources. This created high demand for the stocks, and sent their prices shooting upwards. WSB had remixed and beat Wall Street giants at their own game.

It is important to note that many of the people that originally participated in this act against wall street were people that lived through the 2008 financial crisis. Looking back on the 2008 financial crisis some now refer to it as the great recession. During this recession many people lost their homes and livelihoods because the same sort of people that wanted to short companies like GameStop made bets on the housing market failing in 2008. When this happened, those that made bets against the economy reaped the rewards, big banks got a bailout, CEOs still got their bonuses, and everyday people had their lives ruined (Knights, 2015). One user of WSB posted a heartfelt message on the forum that went viral, scoring over 70,000 upvotes reliving the horrors he experience in 2008 at the hands of wall street. In his message he talks about how his fathers concrete company collapsed, they lost their home, and how this essentially broke him. The content of this message directly contradicted what people in the media were saying which was that users of WSB were greedy and running a pump and dump scheme to make money. The message shows how personal this act was and a protest to some, not just a joke. The poster states how he would rather loose all the profit he made then cave to wall street, the message signs off with “this is for you, dad” (Taibbi, 2021).

It is widely known now that this pandemic has not affected everyone equally. Wealthier people or those with white collar jobs are able to comfortably work from home or from their vacation home. People on the other end of the spectrum are forced to physically go into work at lower paying jobs risking exposure to covid to keep the system running. The pandemic has not just exposed the existing inequalities but exacerbated them (Tett, 2020). As of October 2020, the wealth of billionaires had risen by $10.2 trillion dollars, the über wealthy actually benefited from the pandemic while rest of the world struggled (Neate, 2020). Knowing this is what made it all the more comical when super rich hedge-fund managers cried fowl on national television over the WSB meme stock development.

Looking at the attack on hedge-funds orchestrated by WSB as a form of protest, bares some resemblance to other events of hacktivism that have occurred in the last two decades. The first example that comes to mind is the hacker group anonymous and how they used Distributed Denial of Service (DDoS) attacks to target corporations and governments that they viewed as problematic. The way a DDoS attack works is that a group of people band together to use a software that artificial channels a large amount of activity to a target website, this activity overwhelms its resources and causes it to crash (Serracino-Inglott, 2013). Anonymous performed DDoS attacks on institutions like Sony, The Vatican, and the Australian Government. Anonymous and WSB are similar in that they repurposed technology that was readily available to the masses, coordinated with other people that shared the same views, and hit their target.

WikiLeaks is another example of a simple technology that was remixed and deployed to target and challenge the powers that be. Wikileaks was a very simple website that closely resembled Wikipedia, but where it differed was that its goal was to facilitate the mass leaking of documents that showed organizational wrongdoing from corporate and government whistleblowers (Munro, 2016). Some of the biggest revelations that came from Wikileaks were surrounding cover ups of air strikes in the middle east that resulted in civilian casualties, protocols that were followed by interrogators at the Guantanamo Bay detention camp, and how the National Security Agency was spying on french presidents. Wikileaks also increased peoples skepticism about what the official version of the truth was in many aspects of society (Munro, 2016). How Wikileaks was able to expose what governments were secretly doing around the world using very basic technology is similar to how WSB was able to publicly shine a light on the tactics hedge-funds use and how they are able to manipulate the stock market for their personal gain.

During the last decade we truly started to see the power of networked protests through events that occurred during the Occupy Wall Street movement and the Arab Spring. The Occupy Wall Street movement was a reaction to the injustices of the 2008 financial crisis, rising wealth inequality, and the corporate influence of government. This movement started in New York City but quickly spread throughout the world, largely due to the traction it gained on social networks like Twitter (Tremayne, 2014). Not only did Twitter help spread the message globally, it also helped in organizing people to action and educating people on the issues traditional media refused to cover. In the Arab Spring uprising demonstrators took to twitter to coordinate protests, inform one another of what was happening, what supplies were needed, where to gather, and what areas to avoid (Kübler, 2017). During these two movements activists were able to repurpose the digital communication tools of the day to quickly organize people at a scale and pace that had not been seen before, shocking those in power. WSB was able to do this communicating through reddit and calling its users to action.

Trolling and “shitposting” are a popular form of entertainment on the internet where people will intentionally make statements that are false, misleading, or provocative in order to illicit a visceral reaction from the person that it targets (Ganesh, 2020). This reaction is usually referred to as “raging.” A consequence of trolling aside from getting the target to rage is that sometimes they will get so angry that they will expose or incriminate themselves in their response. With the WSB plan making international news, a slight correction occurred in the overall stock market, causing all stocks to dip a few percentage points. Leon Cooperman, the billionaire chairman of Omega Advisors, and a sort of Mr. Burns like character went on CNBC to explain what was really going on. Cooperman shouted “The reason the market is doing what it’s doing is people are sitting at home getting their checks from the government, okay, and this fair share is a bullshit concept” (Levin, 2021). This statement went viral on social media with people in disbelief as to what they had just heard. Cooperman managed to alienate not just the members of WSB but working people who had been told to survive on one stimulus check of $1,200 for the entire pandemic, invoking Ronald Regan’s myth of the “welfare queen” (Covert, 2019) as a justification. WSB successfully trolled wall street, causing one of their top guys to rage on national television. Humiliating himself in the process while exposing his true colours and detachment from the reality of everyday people.

Griefing is a form of alternative role playing that gamers participate in during online games, particularly in the game Second Life. When a player is griefing they are engaging in a disruptive form of gameplay that aims to push the limits of what is acceptable in the game, essentially trolling other players, sometimes resulting in them being banned (Bakioglu, 2009). Examples of activities that would constitute griefing are spamming chats with swastikas or penises, loitering in a server, or stocking other players. In doing this, griefers do not just disrupt fellow players who take the game too seriously, but they also take up the games resources and challenge the dominant bourgeois taste with their offensive content. Griefing at a large scale can attack the capitalist ideology of the game by crashing servers or disrupting media events causing businesses in the real world to loose money (Bakioglu, 2009). Griefers often claim that they cause these disruptions for the “lulz”, meaning that it is all just a joke in good fun, but these lulz actively hurt the virtual economies in which these games operate. Much of what WSB did could fit into the definition of griefing but in the real world. WSB chose a bunch of meme stocks to buy, saying that you only live once, and inflicted damage on the real world economy. The mentality of WSB closely resembles doing it for the lulz while hiding its true intention of challenging the bourgeois, it is perhaps the ultimate form of griefing.

Apart from using Reddit to communicate and organize, the main tool that was used by members of WSB to buy shares in meme stocks was an application called Robinhood. The name ironically comes from the fictional story of Robin Hood And His Merrie Men in which the sentiment of stealing from the rich to give to the poor is popularized. When the WSB movement started to cause hedge-funds to loose billions of dollars on their short bets, they pulled out every trick in the book to try and protect themselves. The app Robinhood caved under pressure from their investors to remove the functionality that let users buy the meme stocks. This put an end to the exponentially rising prices of shares, if the majority of the users can only sell and no longer buy, the demand is taken away causing the prices to fall. After a week of intense criticism from politicians, regulators, the media, and users Robinhood had to restore the function, but the damage was already done (Gonzalez, 2021). The irony of an app called Robinhood caving to pressure from big money was not lost on people. This served as a timely reminder that whatever pretty face corporations present to the public, whatever their noble mission is they claim to be on, it is vapid and meaningless. They exist to enrich themselves and their investors.

WSB was successfully able to use the strategies of big hedge-funds against them through a de-centralized and crowd sourced way of trading that was based on a large amount of people of lower means buying up stocks. This led to hedge-funds loosing billions of dollars, crying fowl on national television, and trying to do everything in their power to stop the movement. By using a remix ethos to repurpose existing technology and the spirit of internet culture this is likely going to be an event that is talked about for decades. What changes will this act of resistance bring about? It is too early to tell, but when groups or individuals treat the economy like a game of roulette there are bound to be winners and losers of differing scale. Just like a casino in Las Vegas, the house does always win.