This week, the investing world looked on with a mix of admiration and horror as members of a Reddit forum devoted to stock trading collectively sent shares of a seemingly moribund company through the roof.
Throughout it all, befuddled financial analysts on cable TV struggled to explain how an amorphous group of social media users could upend the markets as part of a massive in-joke from which the rest of Wall Street was very much excluded.
The underlying story is that a group of seemingly ordinary retail investors harnessed the power of the internet to humiliate hedge fund investors who had bet deliberately and enormously against GameStop.
Driven by the Reddit forum r/wallstreetbets — whose tagline is “like 4chan found a Bloomberg terminal illness” — the massive run-up in GameStop’s stock spelled disaster for the professional investors who thought that they could make lots of money if GameStop shares continued to sink.
From the rise of Wikipedia, a tremendous free repository of human knowledge; to the ALS Association’s famous Ice Bucket Challenge, a social media sensation that nearly tripled the group’s annual research funding for the disease; to the viral images coming out of pro-democracy protests in Tunisia, Egypt, Hong Kong and other places; the internet has been widely hailed as a transformative technology that’s given millions a voice, empowered small businesses and spread the value of free speech.
This is the tale of the internet that social media companies desperately want you believe still exists.
In many ways, Reddit, which has long billed itself as “the front page of the internet,” is its own microcosm reflecting this dynamic.
The reality, of course, is that internet users have always had this power.
“I think it’s a real example of what we’re already seeing with the way media has been upended,” said Reddit co-founder Alexis Ohanian in an Instagram video this week.
What’s crazy isn’t how people keep using the internet to shake things up; what’s crazy is why we keep acting surprised when the internet does what it was built to do.
