“If you want to call what happened at the Capitol a mob, you can also call what’s happening at GameStop a mob, too,” said Ken Kamen, president of Mercadien Asset Management in Princeton, N.J. Not everyone is thrilled with the rebellion. 'It was a horrible scene': Capitol Police have a $500M budget. “I really do think this is really the start of a new era for how we’re going to perceive the public markets and then the interaction of the consumers with it.” “Just looking at the comments around the internet. It’s something that’s very personal for a lot of people and a chance for Joe and Jane America, the sort of retail buyers of stock, to flex back and push back on these hedge funds,” said Ohanian, who resigned from Reddit’s board in June. The cry: “Rally the troops, my brothers.” And that’s where the GameStop action rose up. Wall Street Bets is a popular forum focused on options trading where online day traders band together to increase their buying power. And, last month, when the major social media platforms banned Trump, Reddit shut down a subreddit where tens of thousands of Trump supporters congregated.īut the activity in finance subreddits hadn’t gotten much attention until now. Reddit has been cracking down on objectionable content like hate speech. They evolved during the freewheeling era of the internet when almost anything goes was the prevailing ethos.Īttitudes at the company are changing with the times. Reddit forums, called subreddits, are cloaked in anonymity and animated by populist fervor. But a major propeller of viral effort is Reddit. They band together on Facebook, Instagram and WhatsApp, messaging services like Signal and Telegram and collaboration services like Slack to trade tips. But social media has given organized actions by retail investors and day traders some real muscle. Message boards have been rife with retail investors trading unsubstantiated rumors, rash speculation and trash talk since the internet's early days. “We’ve watched the internet now, over the last 10, 15 years thanks to the rise of social media and all this infrastructure, bring a bottom-up revolution to so many industries,” he said.
Whether it’s one platform or another, this is the new normal. “I don’t think we go back to a world before this because these communities, they’re a byproduct of the connected internet. “I do think this is a seminal moment,” Reddit co-founder Alexis Ohanian told CNBC on Thursday. The Reddit revolutionįurious Reddit users decided to strike back against the big hedge funds by launching a buying spree of GameStop stock, which caused the price to soar. In short selling, investors borrow a share and sell it in hopes of buying it back later at a lower price – and then pocketing the difference. Reddit users on a forum called "WallStreetBets" took matters into their own hands after hedge funds began unloading the struggling retailer’s stock through a process known as “short selling.” In the same vein, small-pocketed investors used the social media platform Reddit to launch their assault on Wall Street and drive GameStop’s stock price higher. Weeks before the mob descended on the Capitol, Trump supporters refusing to accept the November election results took to social media sites like Parler and other internet forums and circulated plans for a mass protest in Washington that would coincide with the counting of electoral votes in Congress. Capitol three weeks ago in a failed bid to overturn his election loss to Joe Biden. They see parallels between what’s taking place on Wall Street and the streak of populism that powered Trump’s rise to political power and fueled a pro-Trump mob that stormed the U.S. “We are witnessing the French Revolution of Finance,” declared Anthony Scaramucci, a financier who famously served as President Donald Trump’s White House communications director for 11 days in 2017.Īnalysts believe Scaramucci, aka “The Mooch,” is right about the revolution, even if he cites the wrong country. By Thursday, the stock price had surged to more than $480 a share before leveling off and closing at $193. Small investors banding together on social media are taking on big investment firms by running up the stock price of GameStop, a struggling video game retailer whose shares were trading at around $4 at the start of the coronavirus pandemic. Then look at what’s happening on Wall Street. WASHINGTON – You say you want a revolution?
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