For a short time, last week, trading of the stocks for GameStop and AMC Entertainment were halted due to market volatility. These stocks skyrocketed from relative obscurity to high-yielding investments as a group of investors outside of Wall Street decided to take a collective risk. r/WallStreetBets is a Reddit community dedicated to creating, “a community for making money and being amused while doing it.” When in reality, this group, fueled by the proliferation of investing apps like Robinhood, Acorns, and Stash that lure investors young and old with their easy-to-use platforms and sleek designs, is changing Wall Street, hedge funds, and investing more broadly. The full scope of the implications for what was accomplished by these groups last week have yet to be fully realized, but the social implications are already starting to come into focus. In this week’s Lecture Spark, we explore a most exciting or devastating – depending on your end of the losses and gains – week on Wall Street. Specifically, we look at this issue through the lens of capitalism, conspicuous consumption, and the social construction of the economy. We also explore how dominant sociological paradigms can be used to better understand current implications and predict future trends.
LO1: Discuss how the rise of r/WallStreetBets alters the social construction of the economy,
LO2: Understand how ingesting images related to the promise of a quick high yield return on investment can change the observer’s perception of reality,
LO3: Explain what push and pull social factors contribute to the decision to invest.
WallStreetBets founder on GameStop: There is no precedent for this
Jaime Rogozinski, founder of the WallStreetBets trading forum on Reddit, says people are “placing bets on a market in a way that they are actually affecting the odds of the outcome.” He speaks with CNN’s Julia Chatterley about the stock frenzy.
How A Battle Between Wall Street and Reddit Users Made GameStop Stock Skyrocket | Forbes
Between December 28th, 2020 and January 27th, GameStop stock increased by 1,555%. This week, it hit a high of $380 per share and created a new billionaire. Thousands of at-home traders, many perched on Reddit boards, are pouring into a slew of heavily shorted and “fundamentally hated” stocks Wednesday in an effort to squeeze money out of the short bets placed by Wall Street’s elite; here are the stocks–in addition to GameStop and AMC–nabbing mind-blowing gains as regulators start to sound an alarm on the frenzy among retail traders.
How Options-Trading Redditors Fed the GameStop Frenzy | WSJ
Wall Street is in an uproar over GameStop shares this week, after members of Reddit’s popular WallStreetBets forum encouraged bets on the video game retailer. WSJ explains how options trading is driving the action and what’s at stake.
What are the limits of participating in certain areas of capitalism? How are less powerful groups blocked from participating areas like the stock market? Why might hedge fund managers and other career investors and investment groups be worried about a large number of untrained investors betting on the stock market?
How does what happened last week change the way some people look at the stock market? From a symbolic-interaction perspective, how might seeing everyday folks starting to invest and earn a great deal of money attract some to enter into a relationship with the stock market? How are groups like r/WallStreetBets fundamentally altering the social construction of Wall Street?
Why might this current moment be conducive to this type of strategy for wealth accumulation? How might the experience of being homeless, unemployed, or otherwise disadvantaged by the current pandemic inspire someone to take a risk and gamble on the stock market? How can a moment like this inspire hope for the most disadvantaged populations alive in America today?
Why are so many people sharing their earnings with others? What is there to gain from showcasing your earnings and purchases, especially through social media? How might this fuel further participation in participating in the squeezing of hedge funds through betting on short investments? How might this also fuel jealousy among one’s peers? Why might this be desired?
Why might the economy be socially constructed in such a way as to convince us that not everyone can be successful, but at the same time we are all able to be…if we just work hard enough? Why do we limit access to areas of employment like investing for historically racialized and oppressed populations? What is the goal of maintaining a homogenous population of people at the top of the economy while the rest of us struggle in some form to survive?
- Reddit WallStreetBets Founder Calls GameStop Stock Frenzy A ‘Symbolic Movement’
- Inside the Reddit army that’s crushing Wall Street
- No, WallStreetBets isn’t robbing Wall Street to help the little guy
- The GameStop stock frenzy was not about class revenge
- Reddit is sending AMC, GameStop stock to the moon. Here’s how
- All the Ways the GameStop Roller Coaster Could End
- GameStop soars again; Wall Street bends under the pressure
- There Are Ripple Effects of GameStop Short Squeeze, Sonders Says
- Even Karl Marx used his stimulus payment to bet against professional traders
A sociologist using the _______ perspective, with special attention to Karl Marx, would likely argue that this type of revolutionary action taken by subordinate groups against dominant groups in a capitalist society is the only true pathway social change and economic equity.
d. Rational Choice
Thorsten Veblen coined the term _______ to describe his observations of wealthy people around him opting to display their wealth as opposed to displaying what their true means and needs are and how they are being met (or not).
a. Social Virality
b. Wealth Sharing Theory
c. Conspicuous Consumption
d. Relativity of Consumerism
A sociologist using the _______ perspective would likely be concerned with the latent outcomes associated with the rise in popularity of r/WallStreetBets and how they might disrupt stability and social order in society.
d. Rational Choice
Photo credit: iStockphoto.com/Алексей Белозерский