Issue 8

From Reddit to Revolution: How Memes Propel Movements

In late January, Wall Street witnessed history. The stocks for GameStop, a retail chain in the United States that sells games and gaming consoles, shot up from being valued in the single dollars to hitting $347 per stock at its peak. This led to major losses for hedge funds who had shorted the stock, essentially betting large sums on its decline. The shift in stock value was caused by its mass-purchase by users on Reddit, a social networking platform. What initially started off as betting on GameStop stock in jest turned into a phenomenon fueled by anti-establishment sentiments. The internet memes littered through r/WallStreetBets (the subreddit at the heart of the situation) as well as other social media platforms played a critical role in spreading the joke and eventually, shaping what holding GameStop stock (GME) meant as a political statement. What is it about memes that can carry a movement – and how should it alter our understanding of the internet?

Internet memes are multimodal artifacts that are transformed by countless participants, through popular culture for public commentary. They serve as cultural commodities that represent public narratives at a point in history. Memes can also present visual arguments that discuss various ideological practices. Hence, they offer a mode of bidirectional communication in a social sphere–wherein they are shaped by, and actively shape, cultural discourse.  

The use of humor, in its various forms, is a critical feature of the internet meme. Humor is viewed as a means of establishing superiority or providing relief to oneself or others. Most critically, perhaps, it is understood as a medium to highlight incongruity in an environment. This position holds that to laugh is an intellectual activity, based on a psychological motivation to maintain consistency within one’s internal reference frames and external environment. When there is an inconsistency between an individual’s perception of the expected norm and an actual event, humor is used as a means to address the gap. The expression of dissent through humor, hence, becomes a frequently availed option. 

This was observed during the GameStop incident. The memes circulated about GameStop, hedge funds, and the stock market became a channel to challenge the financial systems of the United States, exacerbated economic inequalities, and the narrative of the ‘American dream’ – wherein an individual is deemed to be completely responsible for their own success or failure, regardless of the institutional frameworks that they operate within. 

Source: @OldPappyThomas, Twitter
Source: @herosvrdie69, Twitter

The element of humor in memes allows them to achieve popularity on the internet due to their “feel-good” factor. At the same time, they also contribute to the transfer of information and ideas that would traditionally fall under the realm of mainstream news cycles.

The dependence of memes on pop culture and humor has encouraged notions that they cheapen political discourse. However, this view has been rejected by those who argue that communication of political ideas through memes actually richen political conversations, due to their accessibility among the masses. Internet memes have hence ushered in an era of participatory media that exists as a direct retaliation to the exclusive, traditional media narratives that can be dictated by vested interests. 

Moreover, the circulation of memes also creates a sense of community among people in terms of their ideological leanings, values, and opinions. This consolidating feature of memes is critical to their role in propelling in-group unity, and consequently, action that pervades online spaces. The Occupy Wall Street Movement of 2011 stands testament to the ability of memes to contribute a movement on ground. Aimed at protesting economic inequality in the United States, OWS actively used internet memes to further its message, as well as to respond to developments during protests. Most notably, the event of a police officer pepper spraying peaceful OWS protestors was addressed by the creation of the ‘Pepper Spray Cop’ memes. The string of memes that followed commented on police brutality and protest etiquette, and brought attention to the irrationality of such actions through its depiction in humorous ways.

Source: KnowYourMeme

Internet memes, thus, have emerged as crucial tools that allow for ideological discourses to take place untethered among the masses. Their inherent humor accentuates the crux of several issues, often cutting through semantics that would be at play at the same coverage of events in traditional media. In this aspect, the use of internet memes can be viewed as a revolutionary phenomenon that transfers power to the people to voice their opinions. 

However, notions of nobility that surround the internet meme should be analyzed carefully. The same attributes of a meme that enable people to connect to its message – using humor to tackle incongruity, generating a sense of solidarity, and widening the scope for political engagement – can be utilized to propagate hateful ideas. A case in point is how Donald Trump’s 2016 campaign relied on viciously mocking Hillary Clinton through memes to generate a support base for itself. A meme, at the end of the day, is representative of the views of those who reproduce it. The political waves that any set of memes contribute to, hence, shape a phenomenon curated by their contents. The dissonance between different groups in real life will continue to exist online.

The contemporary potential of the internet meme pervades its original intent to provide its recipients with a laugh. The case of GameStop appropriately exhibits how memes can contribute to a movement, as well as drive it forward. While the United States financial system did not get reformed due to the GME surge, the incident has painted a lasting target on its back – with the possibility of landmark transformations at the horizon. 

Aarohi Sharma is a Psychology student at Ashoka University. Her academic interests primarily focus on the intersection of politics and psychology in society.

We publish all articles under a Creative Commons Attribution-Noderivatives license. This means any news organisation, blog, website, newspaper or newsletter can republish our pieces for free, provided they attribute the original source (OpenAxis).

Issue 7

Taking from the Rich: Reddit, GameStop and the Consequences of Greed

Near the middle of 2019, a Reddit user, known as “Roaring Kitty” boasted his $53,000 investment in “GameStop” a declining video game company. GameStop bought and sold video games, and it isn’t hard to see why that kind of model seems unsustainable in the streaming and digital age. u/RoaringKitty made his post on a subReddit known as “r/WallStreetBets” henceforth known as WSB. Every commenter on WSB cried out that this investment was foolhardy, that GameStop was dying but u/RoaringKitty paid them no heed and continued to keep his investment there. Today, that $53,000 stake is worth $48 Million. How did this happen? 

To begin, we need to understand a few terms. 

What is a share? 

When a company is formed, it’s corpus consists of a set of discrete units. The owners of these discrete units are shareholders and become direct stakeholders invested in the company. In the case of GameStop, there are roughly 65 million shares up for grabs. 

What is a short? 

A short is a financial action one can take concerning shares. While the obvious way of profiting off of stocks is to buy some shares, wait for the prices to rise, sell and profit off of the differences, there is a means of profiting off of the fall in the price of a share. The way to do this is through “shorting”.

What one does is, when they anticipate that the price of a company’s shares is going to drop in value, they “borrow” shares from shareholders, sell them at current market prices, then once the price drops, they buy the shares back and “return” them, and keep the difference for themselves. Now, when one shorts a given company’s stock, it is legally required to eventually return the borrowed shares. This means they have to buy back the shares, regardless of what they cost. 

In the case of GameStop, hedge funds (financial institutions that profit through the buying and selling of stocks and shares) shorted 140% of GameStop’s shares. How do you short 40% more shares than those that exist? Well, that’s actually not too wild. Essentially, shares can be double-counted. Suppose I buy a share in GameStop and then lend it to a broker who intends to short it. This broker sells it to another customer, named say, Saman. Now, to Saman, this is just another share, there is no association with me, so she can further lend the share to someone else who could short it. This way, we can have over a 100% short interest. 

What did u/RoaringKitty do?

Now, u/RoaringKitty didn’t just brag about a weird investment, he noticed something nobody else did: GameStop wasn’t a dying company. GameStop had reasonably large cash reserves, they didn’t have much debt, and with the release of the new PlayStation 5 and Xbox Series, the chain of stores was doing alright. 

Roaring Kitty started talking about his investment on YouTube, Reddit, and TikTok, and people began to notice. Specifically, Michael Burry. Some of you might know him from Christian Bale’s portrayal of him in The Big Short, but for those who don’t, Burry was one of the first people to realize that there was a crisis imminent before the 2008 Economic Crisis and made a massive profit off of it. Burry, at last count, made a 1400% profit off of his investment in GameStop in just under 5 months. 

This discourse on GameStop’s financials, as well as public filings showing massive short interests from various hedge funds like Citron and Melvin Capital, became the seeds of a perfect storm. u/RoaringKitty mobilized r/WallStreetBets with the information that GameStop was viable fuelling thousands of members of the subReddit to buy millions of shares. This artificially drove the price of GameStop stock up hundreds of dollars and decimated the short position of various hedge funds. Melvin Capital lost nearly $4 billion throughout January. 

While initially, buying GameStop stock was sound financial advice, eventually anti-billionaire, anti-hedge fund rhetoric swept the subReddit, and users decided that keeping the stock was now a moral crusade to crush meddling Wall Street titans. You can find posts like this across the website describing their hatred for Wall Street money movers, and this no doubt fueled the stock buying. Eventually, various influencers, including Elon Musk joined the bandwagon, advocating to buy GameStop and crush the short sellers. Musk specifically dislikes shorting since firms have tried to short Tesla several times over the years. 

Robinhood, a free, fee-less trading platform began restricting trading GameStop stock, to avoid “volatility” in the stock market. Now, as surprising as it may sound, Alexandra Ocasio Cortez, Ted Cruz and Donald Trump Jr. all cried out that this was anti-competitive and anti-capitalist, you’d never expect to see the three of them agree on anything, let alone the free market. Robinhood was only the first of several services to restrict trading, an act that has led to several class-action lawsuits. This leaves a valuable question on the table, who gets to truly “regulate” the market? Why is social market manipulation “volatility” while a few billionaires doing it is a “hustle”? The actual nature of power within market structures has been exposed, and it cannot be allowed to fade from public memory. The “free” market is a selectively free market. 

Now, as trading continues it is to be seen which forces buckle first, the Redditors, or the hedge funds. As the value fluctuates, there are ripple effects across the industry. This entire incident is also provoking a series of questions about the power of social media. A user on Reddit mobilized millions of dollars through thousands of small traders, and apps like Parler managed to mobilize thousands to storm the US Capitol. While one shouldn’t conflate the two events, there needs to be cognizance of how these networks hold the power to organize people in ways that the people are not prepared for. But beyond that, the story is still unfolding, and we need to ask ourselves, who wins at the end of this? How do we even imagine “winning” in this scenario? And, where does this leave us? 

Vibhor is a third-year economics major, and frequent Redditor, with an interest in economic history, behavioural science and decentralised systems. He is a frequent critic of the free market and enjoys reading about market failure and similar shenanigans.