They’ve seen the uber-rich grow richer while a pandemic threw tens of millions of people out of work and left many more isolated and vulnerable at home.
Now, they feel, it’s payback time.
Nearly a decade after the Occupy protest movement left
Day traders, mobilized on a subreddit page, have poured about all the money they can find into the stocks of a struggling video game retailer called
Their strategy, of course, is freighted with risk. The prices of the stocks they've bought are now multiples above any level justified by revenue, earnings or future prospects. The danger is that at any time, the stocks could collapse.
Maybe so. But as one Reddit user wrote Friday, asserting that hedge fund financiers would drink Champagne as they looked down upon
“I’d rather lose it all than give them what they need to destroy me ... I’ll burn it all down just to spite them.’’
Their rage and hell-bent drive to pick on powerful
“They figured out how to play the way
Feeding the frenzy have been young traders like 27-year-old
“I’m a college student, so that’s basically a month’s rent for me,” said Weir, who is pursuing a master's degree in marketing.
He did it, he said, because he believes in the cause: Protecting a cherished game store, where he would hang out as a teenager on Friday nights, from financial tycoons who want the company to fail.
And if he loses his investment?
“If my account goes to zero, it goes to zero,” Weir said. “At this point, it’s not about the money. I think this is bigger than the money now”
Frustration and rage over widening financial inequities in the American economy have been mounting for years. The richest 1% of Americans collected about 19% of pre-tax income in 2019, up from less than 11% four decades earlier, according to the World Inequality Database, run by
The financial crisis that ignited the Great Recession of 2007-2009 intensified resentment toward the bankers who had financed the dodgy loans behind the catastrophe and had ignored the obvious risks, only to receive bailouts from taxpayers and largely escape accountability. Rising outrage fueled the Occupy movement, in which protesters took over New York’s
The coronavirus inflicted further pain, flattening the economy and causing more than 20 million Americans to lose jobs. This week, a report from the anti-poverty group
The stock market, the chosen target of the Reddit day traders, has long stood as America's premier symbol of entrenched wealth. But technology, including forums like Reddit, has made it ever easier, faster and simpler for the aggrieved to mobilize, swap information and collectively plot strategy. And e-trading apps, notably Robinhood, allow amateur traders to buy commission-free stocks with one click.
They spotted a vulnerability in the market: The so-called short squeeze.
When hedge funds and other investors want to bet that a stock price will fall, they arrange a short sale: They borrow shares of, say,
But shorting can backfire disastrously if the stock surges instead of falling. Then the short sellers can be forced to bail out of their bets by buying the target stock. Their buying, in turn, can send the stock price ever higher and makes things even worse for the short sellers in an intensifying feedback loop.
Not all the day traders are inflamed by anger. They just see an opportunity to make money and pay bills.
“A lot of people are having trouble paying rent,” said
Yet Goldstein worries that the revolt will ultimately fail.
For one thing, some of the
And the most sophisticated professional traders are no doubt calculating how to capitalize on the chaos. Normally, they have to work hard and invest heavily to determine what their competitors are doing and to profit from that information. By contrast, the Reddit day traders are announcing their intentions, brazenly and publicly.
“I suspect it’s not Robinhood investors and Redditors who are making money,’’ Goldstein said.
She would like to see a different slate of reforms — reforms to rein in Wall Street’s excesses while helping those who’ve been left behind.
“Hopefully, we can ask fundamental questions about whether we want our markets to be speculation-driven or do we want them to create innovation and jobs," she said. "Stop hustling so hard for a buck and instead rebuild the social safety net.’’
Osran said he figures that its astronomical stock rise can save
“It’s fun being part of a movement,” Osran said.
He knows he could lose everything he put into
“We’re all adults, we all know stocks can go up and down,” Osran said. “It’s been insanely lucrative so far, but it could be all gone tomorrow.”
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Pisani reported from
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