From Jan. 12 to Jan. 27, Gamestop’s stock price rose from about $20 to a high of $483. The spike was driven by a massive short squeeze. Many Wall Street hedge funds had shorted Gamestop, meaning they thought it would fall in valuation over time. When the price began to rise, they had to buy the stock back before it shot higher, triggering mass chain-reaction purchases by these hedge funds, thus creating a massive spike in the price.
The initial bump in Gamestop’s stock, however, was not caused by these hedge funds. It was fueled by online retail investors who saw this vulnerability and united together to exploit it. The community that has been center stage in this event — though by no means the only community to buy the stock — was Reddit’s WallStreetBets subreddit.
When looking at the posts that flooded the site as the stock began to soar, it’s clear that profit was not the only motive for these investors. In a massively-upvoted post directed at a fund that shorted Gamestop, a user painfully describes the poverty they experienced during the 2008 financial crisis. They view their investment into Gamestop as “personal,” investing every dollar of savings they have to make the hedge fund’s losses “as painful as [they] can.” The user, along with most of the impassioned Gamestock investors, seek no ends other than punishment for those that have wronged them and maybe some profits along the way. Their grand crusade is “to punish the sort of people who caused so much pain and stress.”
Of course, I do sympathize with these investors. A hatred of Wall Street is only reasonable at this point, and I don’t begrudge anyone trying to make money while also destroying a hedge fund. However, the emotional rhetoric spouted by the retail investors indicates a woefully inadequate conception of solidarity and class consciousness.
The WallStreetBets members, like most Americans, can only conceive of politics as a vehicle for inflicting pain upon enemies. After 2008, the user mentioned above sought to destroy those who he saw as the cause of the catastrophe, not seek justice for those who were harmed by the crisis. Creating an alternative to the devastating practices of the financial world doesn’t even cross the minds of the average American, no matter the ruin it has brought to their lives. Seeing the hedge funds suffer has to be enough; they have lost all hope that the system could ever be better for people like them.
Part of the reason for this, of course, is because seeking punishment is easier than seeking justice. It’s much simpler to scream at the billionaires and inflict negligible damage than to build a real base of working class power, however cathartic the screaming may be. Buying stocks somehow becomes a political and anti-establishment act. The internet and social media give an all-too-perfect space for this kind of fruitless hate. There’s a reason the ultra-rich class who own the social media sites allow this kind of activity to flourish: they know it ultimately does nothing, or even actively diffuses progressive sentiments.
Now that Gamestop’s stock has plummeted back down in valuation — $63 stock price as of writing — the effects of the short squeeze seem almost exactly opposite of the initial intentions. Many retail investors lost thousands of dollars from buying while the price was high, and some of the largest profiteers from the surge turned out to be Wall Street firms. Retail investors will probably be subject to restricted trading to prevent events like this in the future. The power structure hasn’t sustained a scratch, and its victims are as powerless as ever.