Reddit vs Wall Street
Recently the company Robinhood, a financial services app that allows retail investors to trade securities commission free, has come under fire for restricting trades on some stocks. Robinhood was founded to give everyone access to the stock market which is why they have been garnering criticism for restricting free trade of all available securities. This action was in response to a group on the internet deciding to invest in unorthodox stocks such as Gamestop and AMC which led to increased volatility in these stocks. Due to the increased volatility, Robinhood restricted trades of these stocks to protect their users. The ethical question then becomes should Robinhood uphold their initial mission of providing a technology platform that allows the common man to trade or to protect these users from potentially losing a lot of money if they don’t understand what they’re investing in.
Aside from the issue of limiting access to the platform, this becomes an issue of power similar to that described in Manuel Castells paper: Communication, Power and Counter-power in the Network Society. These retail investors have used their influence on social media platforms such as reddit and twitter to come together and raise a few specific stocks. Castells states, “power relations, that is the relations that constitute the foundation of all societies, as well as the processes challenging institutionalized power relations are increasingly shaped and decided in the communication field.” Wall Street, a traditionally old-school system, is typically controlled by the mega-wealthy behind closed doors, however this coalition of retail investors was able to use social media to shift the power in their favor and manipulate the market.
After the restrictions were set by Robinhood, these investors have also used social media to change the public opinion of Robinhood to that of a negative view and bring attention to the hypocrisy of wealthy hedge fund managers who asked platforms to restrict access to these stocks. Both sides of the political landscape have come to support of those being hurt by the restrictions. Castells states, “Politics is based on socialized communication, on the capacity to influence people’s minds. The main channel of communication between the political system and citizens is the mass media system.” What started on a subreddit as a group deciding to buy stocks together has led to a much larger political conversation on the topics of market manipulation, income inequality, and more.
