Money
Power to the Primates: Inside the Subreddit Investing Group that’s Shaking Wall Street’s Tree
Beneath this planet of toxic masculinity, political incorrectness, and scatological humor is a surprising core of human decency
Please note: Denise Shelton is not a professional financial advisor. Nothing in this story should, in any way, be taken as investment advice. Please consult a professional before investing in the stock market.
Anyone watching the stock market lately knows that a Reddit subgroup for retail investors called r/wallstreetbets (WSB) is raising a rumpus with Wall Street’s big fish. Most notably, group members have banded together to promote heavily shorted “meme” stocks like GameStop ($GME) and AMC Entertainment Holdings ($AMC) to thwart the hedge funds betting against them.
David vs. Goliath
Estimates show that activity related to the popular investing subreddit resulted in $70 billion in hedge fund losses in January alone. Most notably is the so-far successful push to save gaming retailer GME from oblivion.
In a March 11 interview with Yahoo Finance, Ihor Dusaniwsky of analytics firm S3 Partners said that GameStop short sellers are down $6.8 billion so far this year. Much of the credit for this devasting blow to hedge fund managers has been attributed to retail investors like the ones on WSB.
The r/wallstreetbets user experience
When I first joined WSB, I was taken aback by the terminology. The talk of “stonks” (favored stocks) and “tendies” (profits), “diamond hands” (refusing to sell), and “paper hands” (giving in to pressure to sell) seemed a bit childish. Some users refer to themselves and others as “apes,” “retards”, “autists,” and “smooth brains.” The numerous slang terms make it difficult for newbies to understand what’s going on. This YouTube video attempts to defend some of the arcane and offensive references. (The creation of custom memes is a popular pastime among WSB members during non-trading hours.)
WSB posts and comments are loaded with references to dildos, various sexual acts, and pledges to do outrageous things if a certain stock hits a certain price.
There’s also what most people would interpret as gay and boomer bashing, misogyny, and other forms of bigotry peppered throughout the discourse. For the uninitiated, scrolling through the posts and comments is like being dropped on a desert island with 9 million drooling, puking frat boys. It’s not pleasant, especially for a female of a certain age like myself.
I was ready to discount the group as a pack of deplorable fools and entitled egomaniacs. But, I was curious because, although I was disturbed by the way WSBers expressed themselves, their mission to beat the billionaires at their own game appeals to me. It gives a whole new meaning to the phrase “Occupy Wall Street.”
“Calm down. Eat breakfast. Stretch. Drink water. Posture check. Put on some background noise. Don’t assume anything and hold your shit together.” — post by u/floodmayhem on r/wallstreetbets
Pre-market, Friday, March 12, 2021, 8:40 am
GameStop Corp. (GME) stock closed Thursday at $260 a share. In pre-market trading Friday morning, it’s up to $270.20. On r/wallstreet bets, the apes are restless.
Due to the erratic nature of the stock price in recent weeks, it’s impossible to say how many of the 9.6 million investors on the subreddit bought last year when the stock was in the single digits, missed the high and are waiting for another surge to sell, and how many are “bag holders” who bought in January for over $300 a share and are desperately hoping at least break even.
Nearly everyone on r/wallstreetbets is in a near-constant state of anxiety. They’re trapped on a funhouse rollercoaster, pitching between elation and despair, plagued by insecurity, indecision, and self-loathing.
“I got absolutely wiped last week. Came in with 2600, got to a high of 11k, then those halts, dear Christmas jesus, the halts..
Left the week at 800.
Fml.” — Mr_Yuzu on r/wallstreetbets on Sunday morning, March 14, 2021
In the midst of the insults, the gloating, and the desperate cries for help there are, more often than you‘d expect, posts and comments offering comfort and counsel to group members. Someone shares that his dad just died, and others send condolences and offer to talk if he needs to. Another person asks if he should buy $GME or pay his utility bill and, in spite of a few “go for its” there are plenty cautioning not to invest anything you can’t afford to lose. Here’s a typical post illustrating that kindness and compassion punctuates discourse within the group.
Apes strong together
This weekend, something incredible happened. Inspired by the WSB nickname for members, people in the group began adopting actual apes on the Dian Fossey Gorilla Fund International website. In fact, the response to the idea of donating to protect gorillas in the wild was so successful that the fund’s director posted a video on Saturday night thanking the WSB’s community for its charitable donations.
Don’t rush to judge
A first glance, the WSB crowd’s chatter is enough to make The Wolf of Wall Street himself clutch his pearls (okay, maybe not him), but first impressions can be deceiving. What I learned from spending time on WSB was that people are complicated. They can be greedy, foolish, irreverent, disrespectful, funny, ignorant, brilliant, helpful, kind, compassionate, and astonishingly creative. Most of the people on WSB know that playing the stock market is akin to gambling, and those who don’t know, are frequently reminded.
I have skin in the game, but not a pound of flesh
It’s easy to get caught up in the seemingly endless optimism and enthusiasm on WSB. I’ve been investing in the stock market since I was 10 years old. My first experience was not positive (anybody want 10 shares of Pan Am?). But, all in all, I haven’t done too badly.
Did I fall under the meme stock spell? On a small scale, yes. I bought 50 shares of $AMC and one share of $GME just for sport. I make it a point not to risk what I can’t afford to lose, so I have resisted the urge to keep buying in hopes of a big payday. I’ll settle for either a modest payday or a valuable lesson. What can I say? I like the stonks.
©2021, Denise Shelton. All rights reserved.
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