4 Plausible Theories Behind The Madness Of GME And How Reddit Fuelled It

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There’s a general feeling that the GameStop saga speaks to something larger about the nature of financial markets, and even our culture.

To try to make sense of it all, we’ve distilled some of the most popular theories that...try to make sense of it all.

1. The “stick it to the man” theory

This theory suggests that these traders are motivated primarily by their disdain for “suits,” the longtime wardens of Wall Street, who, Redditors argue, exploited the little guy to get filthy rich.

As Bloomberg’s John Authers writes, “The people investing today are driven by righteous anger, about generational injustice, about what they see as the corruption and unfairness of the way banks were bailed out in 2008 without having to pay legal penalties later, and about lacerating poverty and inequality.”

2. The “everyone’s super bored” theory

Without much else to do during the pandemic, people have turned to the stock market as a form of entertainment...and to make a lot of money.

Last summer, individual investors accounted for roughly 20% of stock market activity on average, up from 10% in 2019.

3. The “Robinhood” theory

The rise of the amateur investor can be traced back to Robinhood, the app that pioneered no-fee trading and empowered individuals to influence the stock market like never before.

4. The “memeification of society” theory

Some observers have linked the behavior of Reddit’s trading army to other online communities like 4chan that engage in “astroturfing” campaigns. “If you can create enough hype around something, through memes, conspiracy theories, and harassment campaigns, you can manifest it into reality via capital,” Ryan Broderick writes.

Looking ahead... Going Up In Flames

the community behind these frenzied trades ran into some trouble last night. Discord banned the r/WallStreetBets server for violating its policies on hate speech, and moderators of the Reddit forum briefly made it private.