After a year as terminally insane as 2020 managed to be, one expected that 2021 would return to something resembling normalcy. With politics and the continued domination of the coronavirus over our lives, we haven’t come anywhere close to normal, except for in a place we expect to be insane in the first place: the internet.
We aren’t strangers to the real world being reflected on the internet, or even of mass protests and social upheavals being conducted from Twitter onto our streets.. Yet, I’m not sure I can remember any time where an event so ludicrous and so organic came out of social media that comes close to the GameStop stock price revolt this week.
Social media is no stranger to impotent and divisive protest movements, like Occupy Wall Street or Anonymous, that produced more harm than good and became quickly co-opted by the corporate news media. In a twist of hilarious irony, it took people throwing money at a dying video game retailer to provoke such a defensive response from CNBC, Bloomberg, Ameritrade and the arbiters of corporate power in the United States.
Why GameStop of all places? How does screwing with stock price actually affect anybody? It begins with some of the most powerful forces in the domestic stock market: hedge funds.
Hedge funds are private conglomerations of mass financial power and invoke the risky magic of the stock market to enrich investors and plow through private companies. GameStop has for years been failing; once an institution of American gamers, the in-person store has largely been defeated by strong competition and efficient online retailers like Steam and Origin. Several hedge funds, including Melvin Capital, took out short positions on GameStop, expecting to make a killing off of the continual fall of GameStop stock prices.
At first, as a joke, members of the “r/wallstreetbets” subreddit began to buy shares of GameStop stock, which at the time ran about a lowly eight dollars per share. Because of an app called Robinhood, which allows retail investors (read: literally anybody) to buy shares or even fractions of shares, this was surprisingly easy. Others began to catch on-- after all, if you could give just a few dollars to annoy Wall Street, and maybe make a few bucks, who wouldn’t?
However, the real buying started quickly. Serious investors began to drop serious sums into $GME, and the meme train rolled out of control (the rocket emoji being the Redditors’ weapon of choice for the skyrocketing stock). GameStop recorded a 7,000% stock price increase, Elon Musk unleashed his Twitter in support of the Redditors and financial media along with mainstream organizations began to panic.
It wasn’t just a silly green line for the laughs. The stock boost represented real gains for people the system was built against, with users posting screenshots of their profits and promising to use them to pay medical bills and student loans.
On the flip side, hedge funds who had bet against GameStop suddenly found themselves facing billions of dollars in losses on a risk they thought they could never lose—free money turned to potential bankruptcy. Melvin Capital alone reportedly lost more than 30% of their entire market value.
It took bored young people online, most of whom have next-to-nothing in cash to their name, to punish the hubris of the financial elite who thought they were invincible. The corporate media they bankroll has spent years pushing political correctness, cancel-culture and oppression narratives on people who are just trying to work to survive. As soon as the tables turned, these “journalists” circled the wagons around the 1% of the 1%.
This represents a clear portrait of class politics in our country. When COVID hits and millions lose their jobs, a $600 check of one’s own tax dollars should be enough to shut that person up. But hedge funds and banks can expect billions in bailouts (also of your tax money) for mistakes of their own doing as they did in 2009—oh, and they gained trillions in 2020.
Even Robinhood itself abandoned the cause and temporarily restricted customers from buying more stock (which is likely the most flagrantly illegal thing in this whole saga). Perhaps the $GME revolt will represent a win for the little guy. What would really produce a win would be a party willing to reject identity politics and corporate bailouts, rejecting the false promises of socialism while fighting for a fairer and freer market.
I believe that this future is likely, but at the moment, all we can do is embrace that famous American ideal: hope. Although, a couple of memes couldn’t hurt.