The story of how a mob became a movement and a group of smooth brained apes on the internet became the anti heroes of the digital age. (Part 1 of 3).
This is a story about digital communities.
Despite reddit’s popularity (430m users) many people will have become aware of it for the first time this week due to the GameStop ($GME) short squeeze. Reddit is an encyclopedia of text-based chat forums. It is subdivided into topic-specific ‘subreddits’. These subreddits span myriad different subject areas and users subscribe to whichever they’re interested in.
For sometime Reddit has seen itself as the prototypical manifestation of digital community. And this new, digital idea of community has become a defining characteristic of the internet age. It is a term that is used to describe a collection of people orbiting a particular topic at a specific time regardless of their physical proximity to each other. These communities often become part of a person’s identity, replacing characteristic descriptors; “you know Jamie don’t you, they’re a member of ABC community and you may have seen them at XYZ events.” However, not all communities are the same, differing from one another significantly in terms of form and function.
Broadly speaking, there are three types of communities: Mobs, Mediums and Movements. The Mob wants to destroy or change a system without a unified vision of what will replace it. Occupy, Gilet Jaune, Punk, Trump, and Brexit are examples of this type of community. Mediums exist to provide information and concord to an engaged group of participants on a particular characteristic (e.g. nationality or disability), experience (e.g. a newborn baby) or knowledge (e.g. investment advice ).
The last and rarest type of community is the Movement. Movements require a clearly articulated vision of the future and how to get there. This clarity provides members with a singleness of purpose, intent and motivation that overthrows power, undermines convention, buckles systems and redirects nations. Movements are not inherently good (e.g. Fascism, Nazism) but they are most often seen at points in history where a significant segment of society can no longer tolerate the conventions under which they live. Accordingly, civil rights communities have often found themselves galvanised as movements. Examples include the anti-aparthied movement in South Africa, the independence movement in India, the civil rights movement in Northern Ireland , and most notably the civil rights movement in the United States. MLK’s “I have a dream” speech perfectly encapsulates the power in a vision of what exists beyond the status quo. Movements emerge when socio-cultural frustration intersects with ideological feasibility.
Most communities continue as they begin, whether that be a facebook group, a meet-up, a political party or a subreddit. But sometimes, a community can ferment so much energy that it changes shape, becoming increasingly focused, finding leaders within and a cause without. An anthropological gestalt exhibiting elements of mob, medium and movement all at once. This is one such instance: the story of a medium that became a mob that became a movement. This is the story of r/WallStreetbets.
r/WallStreetBets has a somewhat unsavoury past. Controversy clings to it like a shadow. It is, ostensibly, a forum for ill-disciplined gamblers to exchange the money they’ve finagled out of friends and relatives for internet points through anxiety-inducing financial loss. It is a place where people with little to no training, bereft of inside knowledge and minimal attention to detail will wager everything they have and more (much more) on an earnings report or an Elon Musk meme. r/WallStreetBets is the place where the kids who put more time into figuring out how to cheat the test rather than study the material gather for one last roll of the dice in dank irreverent sub-basement of the internet.
It has its own dialect: YOLO, stonks, degenerates and diamond hands. Users refer to each other as “retards”, “autists” and “smoothbrains”. They joke about their wives’ boyfriends. Memes and emojis are integral to communication. They celebrate big wins and exalt big losses. They seek out ways to cheat the system and inevitably end up losing more money than they had to begin with. Winners become heroes, losers become legends.
It has been around for years, existing as a small subreddit for people to post screenshots of their YOLO trades (YOLO: 1. Use 100% or more of your capital. 2. Pick an option OTM, 3.Use the weeklies, 4. Ignore your stop-loss, 5. Diamond hands) and as a Martin Shkreli shrine. It began to attract the attention of mainstream Reddit after some big wins and losses (wolfman, guh-guy) ended up on Reddit’s high profile Frontpage.
It grew steadily attracting a particular type of cartoonish “degenerate” eager to get the world, or anybody, to notice them. There have been frequent questions about the morality of a subreddit that encourages (typically) young men to gamble away their (or their families’) money on trades they know little about offering nothing but Rreddit ‘karma’ (the points gained by a user when other users ‘upvote’ their posts) and meme status in return. It was, at this point, a Medium in community terms. People with common interest gathering to discuss it, bereft of long term ambition or goal or conscience.
After some time away, the original creator of the subreddit, u/jartek (aka u/WSBGod) reappeared. Jartech got involved in some sketchy dealings trying to commercialise subreddit access and user information and was promptly removed as moderator and banned from reddit (but only after banning thousands of members who spoke out against him).
The remaining mods regained control and went right back to doing almost absolutely nothing. The sub was still irreverent, obnoxious and reckless, regularly romping across the line of good taste, decency, morality and financial sense – but just as regularly being stomach-achingly, breath-takingly hilarious. But looking back on it now, it’s clear that something did happen. The community, without realising it, took a stand. It clarified, for the first time that it did indeed have values and even went so far as to intimate what they might be. It was becoming a mob. Dobby is free elf.
Around this time a member of r/WSB called u/deepfuckingvalue had identifed, through really solid financial analysis (Michael Bury of big short fame came to the same conclusion), a very interesting opportunity. He was analysing the company GameStop, a bricks and mortar store that sold video games and accessories. GameStop was an important cultural presence for many young boys through the early part of the century but ecommerce and digital downloads impaired the company’s prospects quite dramatically. Further weakened by the coronavirus, it seemed as though GameStop was destined for the great fuzzy purgatory of nostalgia movies.
But then a new billionaire investor who specialised in e-commerce emerged, along with a new board. A reduction in Covid-19 related restrictions followed and GameStop seemed to have been handed a new lease of life. Maybe the market had been too harsh on the stock. Maybe it wasn’t dead yet after all. When u/dfv investigated further he realised that a cabal of large institutional investors had gambled heavily on GameStop going bankrupt. They had borrowed shares and sold them in the hope that they could buy them back cheaper later, pocketing the difference (so-called ‘shorting’).
The problem with this plan was that they had sold more stocks than were available to buy on the market, by quite a considerable amount. And u/dfv had noticed…