Populist movements against ruling elites have been the big political story of the past five years. But at the very moment when elites appear to be winning political battles again, a new threat to their power emerges — this time aimed at Wall Street rather than Washington.
Thousands of small retail investors, organizing through online forums like Reddit’s “WallStreetBets” board, are locked in a battle with hedge funds this week. The retail investors are backing stocks that have been heavily shorted by hedge funds, most notably GameStop ($GME) but also AMC ($AMC), BlackBerry ($BB), and Nokia ($NOK).
And the hedge funds appear to be losing. Thanks to the meme-driven efforts of Reddit’s retail investors, GameStop’s previously moribund stock has climbed from approximately $39 dollars last week to $347 on Tuesday — an increase of almost 800 percent.
There’s already talk that Melvin Capital, a hedge fund that bet big against GameStop, is going to need a bailout (not from taxpayers, thankfully, but from its fellow hedge funds).
Not every hedge fund has been harmed by Reddit’s antics — Blackrock is estimated to have made more than a billion dollars, as it happened to own a great deal of $GME stock.
Nevertheless, the panic continues. Like clockwork, mainstream journalists have begun to demonize the little traders of Reddit, comparing them to Nazis and the Capitol rioters.
For context, here’s a post from Reddit, the epicenter of the meme stock revolution. These are the people that journalists are trying to tie to Nazis.
I know no one will see this, but I’ve made an entire paycheck in the last two days, nothing compared to most of y’all, but as someone with huge medical debt this is actually life-changing for us, allowing us to actually catch up and get a grip on our finances I’m going out to get my kid some new toys and have a nice meal for the first time in as long as I can remember.
All of this is unacceptable to Wall Street, which is scrambling to contain the Redditors. The president of NASDAQ is now saying the exchange will monitor “social media chatter” and halt trading if it correlates with “unusual activity” in stocks.
In other words, they want to rig the game against the little guy. Retail investors, talking amongst themselves on the internet and coordinating their investment strategies to turn a profit? Only the big Wall Street investors are allowed to do that!
Two platforms for retail trading, including TD Ameritrade and the highly popular RobinHood, have also decided that ordinary people making money is a problem. They’ve shut down trading on the stocks targeted by Redditors.
Big Tech censorship is another method of control that elites are leaning on. Discord, which allows users to host voice chat servers, banned the WallStreetBets community yesterday, citing “hate speech.”
WallStreetBets, the Reddit community that sparked the ongoing uprising, would be wise to take measures against censorship by the owners of Reddit.
They may want to borrow a trick from the_Donald, the community of 800,000 Trump supporters that was blacklisted from the site last year, and establish an independent presence away from Reddit’s control. That’s what the_Donald did — their independent site, patriots.win, is thriving.
It’s a long way from being over — it’s arguably just beginning — but the saga of Reddit versus Wall Street already has echoes of previous populist insurgent movements.
Once again, a movement has come out of nowhere to threaten a citadel of establishment power. Once again, the elites are responding with spluttering rage, demanding that special measures be taken. Why? To retail investors, it looks like they want to stop small-time investors from making money.
At the end of the day, Wall Street is panicking because hedge funds appear to have made bad bets and retail investors on Reddit appear to have made good ones. Seems fair, doesn’t it? Until somebody changes the rules, anyway.
Just as they clamped down on the populist political movement by killing freedom of speech on the internet, expect elites to introduce all sorts of new rules and regulations — both online and in the world of finance — to prevent the Reddit revolution from spreading.
They may succeed. They run the show, after all. But once again, another swathe of the public will get to witness just how rigged the game really is.
Allum Bokhari is the senior technology correspondent at Breitbart News. His new book, #DELETED: Big Tech’s Battle to Erase the Trump Movement and Steal The Election, which contains exclusive interviews with sources inside Google, Facebook, and other tech companies, is currently available for purchase.