Mobilizing the Mob, Moving the Markets
Posted in 2021 The Gnovis Blog
By Nicholas Budler
January was a whirlwind. The “Stop the Steal” insurrection was something beyond what most Americans have ever seen in the nation’s capital. People at home watched on TV and on social media as the President’s protest devolved into what seemed like anarchy. The chaos was evident as rioters swarmed around the Capitol, seemingly without purpose or direction. Barricades were ripped down, windows were broken as people climbed inside the building, and the Senate floor was eventually overrun.
A few weeks later, in a month that felt like it wouldn’t end, GameStop’s stock started rising. Quickly. Investors around the country, in what some are calling a “digital populist uprising,” were investing in a dying company in the name of screwing over the Suits of Wall Street. At the height of the short squeeze—driving up the stock price until short-sellers couldn’t maintain their positions—assumed to be started by Redditor “DeepFuckingValue” and the now-famous r/wallstreetbets subreddit, the stock value was making people rich.
When the dust settled, these movements left many people wondering how it all happened, how the chaos was coordinated. And the Internet is at the core of that question.
Redditors used the platform to communicate instantaneously about updates in the stock price, about the questionable role of Robinhood when they paused trading, and about the best time to sell. The r/wallstreetbets thread was packed with analysis from amateur traders, Q&A posts, and anti-establishment rhetoric.
Similarly, albeit with a different motivation and many pairs of zip ties, insurrectionists used social media—in particular, Facebook, Parler, and Twitter—to build the movement that led to the events of January 6. There were posts about bringing guns, Facebook pages with addresses of political leaders, and inflammatory Tweets from Trump. The anti-election rhetoric came to a boiling point through the collective hype created by conspiracy-fueled social media discourse.
And on January 6, social media played a crucial role in the unfolding of the actual events. Trump’s tweets, the innumerable selfies from inside the Capitol, and the shared plans of Capitol Hill’s layout among insurrection groups all enabled a sense of order that thrived on the apparent chaos of the day.
Regardless of political affiliation or interest in the stock market—which is not my area of expertise so please don’t ask for advice—there are similarities between the events based on the decentralization of the Internet that allows for instant communication, real-time information sharing, and mass mobilization. And, at a tumultuous time politically, people are taking action when they feel like the government is letting them down.
And this seems to be the case for both events in January. GameStop small stock buyers felt disenfranchised by Wall Street Traders, citing power and a desire to resist the system as key reasons for participating in the short squeeze. Many investors felt like they had nothing to lose, choosing to band together with others who felt similarly about the financial system’s structure.
These movements point to dissatisfaction with the institutions that create and maintain power imbalances—politically and financially. An increase in dissatisfaction should come as no surprise as polarization continues to drive people into niche groups online. And with the recent crackdown on extreme speech online, these groups will get harder to track and understand as they migrate to more anonymous platforms like Parler and Discord.
And these social media platforms know what is happening on their sites. The subreddit r/wallstreetbets got a record 73 million page views in 24 hours and Twitter finally blocked Trump from tweeting. But the role of these platforms in preventing mass mobilization is still unclear, a role will require a fine balance between openness and censorship. Questions about the role of companies like Facebook, Robinhood, and Parler should be addressed immediately.
In the meantime, there are creative solutions taking place: To identify Capitol rioters, women in D.C. used dating apps and the FBI used Facebook photos and live streams. In response to Robinhood, Redditors turned to other platforms, like Twitter, and put pressure on the company, and create awareness about the injustices of the company’s response.
While the Internet is neither hero nor a villain, it will continue to play a central role in these crowdsourced movements—as we saw in Arab Spring, #MeToo, and Black Lives Matter. The dissatisfaction with a system that reinforces social structures will likely grow online, leading to more movement of mobs and markets.