GameStop, WallStreetBets, and Capital as Power
Activist Retail Investors and the Future of Financial Markets: Understanding YOLO Capitalism
This chapter examines the r/WallStreetBets phenomenon and the sudden and spectacular rise in GameStop’s capitalization from the perspective of capital as power. It argues that the GameStop event demonstrates not only the power of social media for the future of retail investing but also the fact that capital should be theorized as differential social power measured in monetary units. There is little doubt that levels of capitalization are tethered to the production of goods and services and earnings generated by corporations. However, the GameStop event highlights a central riddle of modern corporate capitalism, as valuations have been demonstrated to fail to incorporate broader aspects of price creation, problematizing the valuations of companies. To study these questions, the chapter looks at the herd mentality or “meme mentality” of r/WallStreetBets, a sub-Reddit which at one point outgrew ten million subscribers. The chapter also considers what can be called “herd investing” and explores whether such practices might become a permanent feature of stock market investing.
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