If you wanted to, your meme account could crash the World economy
( Austin Distel / Instagram )
Maybe you heard something about an Occupy Wall Street in middle school, a global financial crisis here or there, someone called RobinHood; something about a GameStop a couple weeks ago? A lot of the people who talk about stocks seem like they are either on steroids and lots of cocaine or spent their formative years on 4Chan. If your favorite movie is Wolf of Wall Street and you don’t see how it’s a critique on capitalism and overconsumption, just stop reading here.
If you are interested in demoralizing hedge fund investors, abolishing capitalism and maybe even learning how your meme account could have bearing on the global economy however, I implore you to continue.
What the hell happened with GameStop?
On Reddit there are many forums, some of which I frequent and some I avoid. I tend to avoid the ones that are focused on making money and personal development via financial gains. (Pack it up, Dave Ramsey. I’m not giving up my iced matcha WITH oat milk, thank you.)
Anyway, one of the forums is called r/WallStreetBets (it’s since been shut down, and restarted on a new server). On this forum a group of Reddit users noticed that a hedge fund called Melvin Capital was “short”-ing GameStop stocks.
Wait, what is short selling?
Short selling is one way hedge funds make their money. Basically what they do is borrow stocks from a stock broker and resell them to another investor or investors (people on RobinHood or any of those other apps where you can buy and sell stocks). They do this with the belief that the stocks that they just borrowed will lose value over time.
Then, after the stocks lose value, the hedge fund (or the person who borrowed the stocks to short sell), will purchase back the depreciated stocks from the investors. Say you sold 10 shares of GameStop stock at $100 dollars a share to investors, knowing, or having an inkling that GameStop was going to crash at some point in the near future and those borrowed shares would not be worth $100 each by the time you chose to buy them back. Next week, GameStop’s stock crashes and is only worth $50 dollars a share, so you buy back all of the borrowed shares and make $500 because that initial sale was for $100 a share.
But, what the hell happened with GameStop?
Reddit users, being the gamers that they are, began to notice these GameStop stocks tanking and being shorted. Soon, enough they realized what was going on. A post titled “An Open Letter to Melvin Capital, CNBC, Boomers, and WSB” went viral on the forum receiving tens of thousands of upvotes and the movement began.
The post discussed the OP’s personal hardships during the 2008 financial crisis. They talked about having to struggle growing up with food insecurity, having to work as a teen to help their parents pay bills and basically said “Power To The People” with regards to the GameStop situation. Post after post blew up in the r/WallStreetBets and even other sites encouraging folks to buy even just a few dollars of GameStop stock and to hold their stock positions if they were already in.
I know I threw a couple of bucks at it, just to be a part of what was going on. The hype for GameStop stock got so intense that trading apps like AmeriTrade and RobinHood suspended purchase of GameStop stocks, which upset people even more, considering RobinHood had marketed itself as a trading app for the everyday person. Even so, hours and days passed, GameStops’s stock price surpassed $400 and Melvin Capital was rumoured to have filed for bankruptcy over it. There were a few other stocks like AMC that also got some attention during that time for allegedly having been shorted, but not much came of it. GameStop’s stock position has also since crashed back down, but it was sure fun while it lasted.
Can a meme really have bearing on the world economy?
I’m no expert, but it sure seems like it more and more these days. For example, it seems like everytime Elon Musk (yuck! Free Grimes!!) types the word ‘Doge’ on Twitter, the DogeCoin stock price shoots up. I mean DogeCoin’s icon himself is based on an early 2000’s meme. With much of the world’s population on social media and the shareability factor of memes at an all time high, I can see memes not only having bearing on the world’s economy, but even on public opinion when it comes to world events and social issues, which in turn has bearing on the economy. So, if you’re reading this and you like making people like hedge fund managers cry, and don’t have a meme account already, then GET ONE.
Ingrid O’Connor is an Online Writer at Rowdy Magazine. She loves poodles, Red Bull and late night talks with friends. Her big three are Pisces, Taurus & Libra and has paid for multiple professional astrological chart readings despite claiming she doesn’t believe in astrology.