The French Revolution of Finance
If you’re on social media, watching the news, or even strolling around campus, you’ve probably heard at least one mention of “Wall Street” or “GameStop.” This week has been a very interesting week in the world of finance. To put it succinctly, hedge funds were betting on GameStop($GME) going out of business soon. They purchased tens of millions of dollars of stock options reflecting this mentality and announced it to the world. A Reddit community aptly named “WallStreetBets” took particular offense to this, and declared war. Five and a half million users all began cheering each other on in the comment sections and creating memes to fan the flames.
The sheer demand for the stock skyrocketed prices over 700% of the original value in a matter of days. The hedge funds had messed up big time. When they purchased their “shorts” (a stock that gains value if the price decreases), their losses could potentially surpass the total value of their company. The hedge funds realized too late that they were facing losses totaling in the billions of dollars and began to panic. When the amateur investors of WallStreetBets figured this out, they doubled down and screamed to buy more.
Their message has been spreading like a wildfire across the internet. Soon, everybody was talking about GameStop, making money, and sticking it to the hedge funds.
The masses rallied behind them in the name of messing with corporate investors. Their message was clear: they are tired of Wall Street running the place. This display of counter-power is not only impressive, but also textbook. Castell writes, “in all known societies, counter-power exists under different forms and with variable intensity, as one of the few natural laws of society, asserts that wherever is domination, there is resistance to domination… In recent years, in parallel with the growing crisis of political legitimacy, we have witnessed the growth of social movements, coming in very different forms and with sharply contrasted beliefs, yet opposed to what they often define as global capitalism.” The trend is beginning to die down as people cash out and the SEC takes action, but it’s gotten people to start talking. The roots have taken hold, and now politicians and the government have taken notice. It’s impossible to say so far, but a simple internet forum may have unwittingly sparked major change.
