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r/WallStreetBets and the Illusion of Rebellion

On the morning of January 28th, 2021, retail investing giant Robinhood and similar brokers halted trade of certain stocks and their options, bringing the tempers of millions to a fever pitch. Public expressions of outrage crossed party lines. Ted Cruz and AOC alike chimed in on what they perceived to be injustices against the common man in favor of corporate interests, given more than 55% of Americans are directly invested in the stock market as of 2020. [1] [2] Many retail investors such as myself wondered aloud: could this be a turning point, however small, in the way our society perceives its divisions? Can the common man unite in the show of healthy middle-class solidarity that is often dreamt about? My conclusion, unfortunately, is this: absolutely not.

To understand why this financial upset falls short of the political upheaval many have been clamoring for, it is important to review the factors leading up to the uproar. At the tail end of January, amateur day-traders congregating on Reddit’s WallStreetBets forum spearheaded a mass purchase, and subsequent squeeze, of heavily shorted securities such as Gamestop, Blackberry, and AMC, sending the prices of what many considered antiquated, strip-mall chic stocks into the stratosphere with cries of “to the moon!” and “we like the stock!” Countless joyful users of the forum posted screencaps of their portfolios, with many experiencing gains in the thousands of percentage points.

Getty Images

Of course, this success was not unanimous. On the other side of the squeeze were the firms holding the shorts — massive hedge funds and investment banks such as Melvin Capital. Melvin, who took a 53 percent hit on their January investments, was bailed out in a USD $2.75 billion deal from fellow management funds, Citadel and Point72, in a last-ditch effort to save them from insolvency. Reddit users mocked the inability of the firms to support themselves, drawing comparisons to the artificial propping-up of institutions last seen in the financial crisis of 2007–2008. Yet, this didn’t end the gains for shareholders, with prices continuing to rise on $GME and related securities. To many on the message board, this seemed to be a massive opportunity for a change in the power dynamic between retail investors and the financial giants.

And then, on the morning of the 28th, the unthinkable happened: brokers began to limit the free trade of securities on the market. The chief offender was Robinhood, who, citing the clearinghouse-mandated deposit requirements meant to ensure the safety of investors’ money, completely halted purchase of certain stocks and their options, only allowing users to liquidate their shares. [3] Brokerages such as TD Ameritrade, Charles Schwab, and others paused trading of options. Pandemonium struck the online community, rallying against what seemed to be the collusion of the elite to cut their collective losses. Then began the cultural attacks. Omega Advisors CEO and former Goldman-Sachs asset management innovator Leon Cooperman in a CNBC interview called the young retail investors of WallStreetBets “people sitting at home, getting their checks from the government,” saying “this fair share is a bullshit concept.” [4] The New York Times described them as “propelled by a mix of greed and boredom.” [5]

In the face of these perceived injustices against the common man, however, a new, populist sentiment sprouted, driven by the outcries of retail investors and amplified by social media. The internet railed against their bindings, with one WSB user criticizing their portrayal by mainstream media, saying “there is palpable elitism at play here.” [6] AOC and Ted Cruz tweeted their support of investors, promising an investigation. Elon Musk, too, spurred on investors, tweeting “Gamestonk!!” and linked the Reddit board. [7] The Wall Street Journal reported that Reddit users had “upended the natural order.” [8]

Elon Musk via Twitter

Could this new movement maintain its furor and sustain bipartisan action against free market infringement? In my opinion, the “uprising” was over the moment the mainstream media and public figures started co-opting the outrage, watering it down to be fed to audiences in bite-sized pieces.

As tends to be the case in the ever-increasingly polarized arena of American politics, even the issues that are seemingly most divorced from public policy are ripe for the picking as ammunition in the perpetual partisan punch-up. For the moment Ted Cruz crossed party lines to agree with AOC in a show of solidarity, she fired back immediately with snappy remarks about the events at the Capitol, saying “you can resign,” and remarking that Cruz was complicit with the violent actions that had taken place earlier in the month. [9] By using her platform to lampoon her political rival with an unsubstantiated claim, AOC (presumably unknowingly) deflected attention away from the bipartisan issue at hand toward an overtly political one. Though it is unlikely her intention was to gloss over the perpetrators of the freeze, her reaction was both enabling, and admittedly unsurprising. After all, politicians and bureaucrats of their ilk survive on partisan conflict, and should political unity really be possible, they might find themselves out of a job.

Those truly at the center of the squeeze were able to capitalize on the diversion of focus granted by political figures, dodging out of the limelight as media sensationalists turned to cover the partisan squabble. Robinhood was quick to sidestep consumer complaints, despite being hit with a wave of class-action lawsuits, and continued to air a Super Bowl advertisement asserting that “we are all investors” (it’s worth noting that on YouTube, both the like-dislike ratio and the comment section were disabled by Robinhood). Corporate interests, all too aware of the combined fallibility and laziness of the average American consumer, quickly overwrote the outrage and, for the most part, minimized the hit to their public image.

Gabby Jones | Bloomberg | Getty Images

It seems that not only was the cultural impact minimized, but the temporary financial imbalance was corrected as well. Once the dust had settled, analysts at J.P. Morgan suggested that hedge funds had been playing both sides, with one firm, Senvest Management, reportedly making USD $700 million on GME alone. [10] Having flown under the radar of WSB users and the media, those in the know were able to subvert public expectations and ride the wave with a flourish of corporate subterfuge.

Weeks later, it seems that what appeared to be a monumental upheaval at the time will forever live on as merely a weekly headline to the general public, and another reason to curse the establishment for retail investors. As Gil Scott Heron asserted in his warning about the ability of corporate powers to defuse a movement, “the revolution will not be televised.” And when idiotic personalities such as Jimmy Kimmel herald your cause on late-night TV with cries of Russian disruption, I believe your movement is as good as dead. [11]


[1] Cruz, Ted. “Fully Agree. Https://” Twitter. Twitter, January 28, 2021.

[2] Saad, Lydia. “What Percentage of Americans Owns Stock?” Gallup, March 19, 2021.

[3] Robinhood Team. “What Happened This Week.” Under the Hood. Under the Hood, January 30, 2021.

[4] Billionaire Investor Lee Cooperman on GameStop: This Is Not Going to End Well for the Public. CNBC. CNBC, 2021.

[5] Phillips, Matt, and Taylor Lorenz. “'Dumb Money' Is on GameStop, and It's Beating Wall Street at Its Own Game.” GameStop Stock Soars as Reddit Investors Take On Wall St. - The New York Times, January 27, 2021.

[6] “r/Wallstreetbets - NY Times on Our GME Run: ‘Propelled by a Mix of Greed and Boredom...".” reddit. Accessed March 13, 2021.

[7] Musk, Elon. “Gamestonk!! Https://” Twitter. Twitter, January 26, 2021.

[8] Banerji, Gunjan, Juliet Chung, and Caitlin McCabe. “GameStop Mania Reveals Power Shift on Wall Street-and the Pros Are Reeling.” The Wall Street Journal. Dow Jones & Company, January 27, 2021.

[9] Ocasio-Cortez, Alexandria. “I Am Happy to Work with Republicans on This Issue Where There's Common Ground, but You Almost Had Me Murdered 3 Weeks Ago so You Can Sit This One Out.Happy to Work w/ Almost Any Other GOP That Aren't Trying to Get Me Killed.In the Meantime If You Want to Help, You Can Resign. Https://” Twitter. Twitter, January 28, 2021.

[10] Fitzgerald, Maggie. “GameStop Mania May Not Have Been the Retail Trader Rebellion It Was Perceived to Be, Data Shows.” CNBC. CNBC, February 5, 2021.

[11] Nolan, Emma. “Jimmy Kimmel Sparks Anger for Calling Reddit Investors ‘Russian Disruptors.’” Newsweek. Newsweek, February 1, 2021.


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