“Eat the rich.”
“Hold the line.”
Reddit users in the Wall Street Bets (WSB) community are basking in the rage, nihilism and chaos they’ve injected into the global financial markets after they upended the system by driving up the stock price of struggling companies such as GameStop.
The WSB community has upset some of the biggest hedge funds in the world with its David-vs.-Goliath approach, all because of a clever financial move that’s being referred to as a “meme stock” or “stonk.”
The strategy involves marshalling the WSB community to buy stock in companies that major investors have “shorted,” or bet against, because the experts expect those stocks to fail. The sudden surge of buyers drives up the value of the stock, and the major investors are squeezed into cutting their losses and giving up their short bets. The major investors lose money, while the Reddit buyers watch the value of their stocks soar (and perhaps cash them out for a massive profit).
The community started its stock blitz earlier this week with GameStop, a foundering video game retailer, before moving on to brands such as AMC, Blockbuster and American Airlines. Now they’re hunkering down and calling the big investors’ bluff, even as more people outside the community join in the cause.
The meme-stock traders were mocking the big investors and celebrating their digital winnings on Thursday, as scrutiny intensified on their wildly successful scheme. There was also a strong “nothing to lose” attitude in many of their posts, as they treated their investments as a small price to pay for the resulting chaos.
One user mocked hedge fund managers and business news outlets with a screenshot of his or her six-figure returns on GameStop.
“Guess what I did yesterday?” the user wrote. “Went to work then got drunk watching anime until 12 a.m. Guess what I’ll do tomorrow if I lose all these gains? Not a goddamn thing different.”
Another user shared a captioned scene from The Dark Knight, in which the Joker gleefully burns a pile of money.
“It’s not about the money, it’s about sending a message,” the user wrote, in a quote from the Joker.
Many people repeated calls to “hold the line” and avoid cashing out on the artificially high stock, in order to make life harder for the big investors on the other side of things.
They also railed against e-trading apps such as Robinhood, which clamped down on WSB-related stock trading on Wednesday night. The app is one of a few that make it easy for anyone to dabble in the markets, but it has selectively halted all purchases of WSB-targeted stocks.
One Toronto-based WSB member told Global News that he invested in GameStop before the stock took off, in large part due to advice he read on the Reddit community. He says he’s enjoying the skyrocketing value now, but he still plans to hold on after the hype dies down because he likes the company.
“I have no problem staying in there long-term, and whatever happens, happens,” he said, on the condition of anonymity to retain his privacy as a member of the group.
He added that the whole GameStop journey, including the short bets and Robinhood’s selective crackdown, has exposed the power imbalance between large and small investors.
“It starts to seem like as a regular person, the rules that apply to me vs. the rules that apply to a financial institution are very different,” he said. “There’s nothing illegal about it. They shorted that stock like crazy, and now regular people got on it. If another bank did it, they’d be like, ‘Well, that’s business.’”
Ja Rule, the rapper and former Fyre Festival investor, joined the calls for solidarity on Thursday morning.
“DO NOT SELL!!!” he tweeted, after blasting Robinhood. “HOLD THE LINE.”
Ja Rule’s endorsement instantly made others feel a bit leery about the whole endeavour.
“Signs of the apocalypse: Ja Rule is giving trading advice,” one person joked.
Several users shared their own hard-scrabble stories on Reddit, and vowed to make Wall Street investors feel a bit of that same desperation.
“You’re trying to scare us into selling. It won’t work,” user u/Hungry_Freaks_Daddy wrote in a post that was later shared widely on Twitter. “I have lived basically paycheck to paycheck for my entire adult life.
“I’m here to say f— you and to be part of this moment, this movement… I risk my money happily. I am not the least bit scared or worried. You might be a financial expert, (but) I am a survival master.”
Reddit founder and former chairman Alexis Ohanian applauded the WSB trades on Thursday, tweeting: “This is going to be in the textbooks one day.”
Ohanian highlighted several stories from people who saw the scheme as revenge against big banks for the recession of 2008.
“Occupy Wall Street didn’t have Robinhood accounts and their figurative drum circle has gotten a LOT bigger thanks to the open internet,” he tweeted.
“This is personal for a lot of people.”