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The Rise of the Redditors: How One Notts’ Society Got Caught in the Crossfire of a Stock Market Frenzy

30 January 21 words: Ashley Carter
photos: Mann Hans

What do Wall Street, Reddit, GameStop and one of the most bizarre periods of trading in the history of the stock market have to do with Nottingham? Well, it has something to do with Robin Hood…

What is GameStop?

You’d be forgiven for not having heard of GameStop before this week. The American video game and electronics retailer (think CeX but on a bigger scale) has gone from the brink of obscurity to being firmly placed at the centre of a Wall Street scandal that hasn’t come close to being resolved.

In the past week, GameStop’s share price has soared by over 300% as amateur investors, coordinated on the Reddit forum r/WallStreetBets, all purchased stocks in the struggling video game retailer.

Why them?

GameStop wasn’t chosen at random - far from it. The combined impact of the pandemic plus a sharp drop in the reliance of physical media in the gaming world has seen the company heavily shorted by hedge funds.

Shorting, or short-selling, is the act of an investor borrowing shares and immediately selling them in the hope that they can scoop them up later at a much lower price, return them to the original lender, and pocket the difference. While it can be extremely profitable, it’s considered amongst the riskiest stock market strategies as the potential losses are unlimited.

Is that legal?

While short-selling is legal, it’s morally questionable. Rather than betting on a company doing well, you’re not just profiting from their failure, but helping speed up the process. It’s like borrowing your mate’s new iPhone, breaking it, waiting until it’s on sale, then replacing it with the cheaper version. Obviously it’s a lot more complicated than that, but who doesn’t love a good analogy?

So the merry men (and women) over at r/WallStreetBets noticed GameStop being heavily shorted and bought big, driving the price up and causing losses in the billions for the hedge funds. At a time when social injustices are under a microscope anyway, it created a perfect storm of David vs. Goliath-style justice, with anger at perceived long-held injustices perpetrated by greedy Wall Street elites rapidly spreading across social media.

Many of the amateur investors have found themselves incredibly wealthy overnight (on paper, at least) but it’s not really about making money. While plenty jumped on the bandwagon to make a quick profit, the core principle was to hold on to the stock for as long as possible, inflicting the most damage on the hedge funds that had targeted GameStop for failure in the first place.

So what has this got to do with Robin Hood?

Good question. In 2013, Vladimir Tenev and Baiju Bhatt set up an app that aimed to provide everyone with access to the financial markets, rather than just the wealthy elite. Naming it Robinhood – you know, because he stole from the rich and gave to the poor - the app provided commission-free trades, and was weaponised by the army of Reddit investors to trap the hedge funds in the GameStop short-squeeze that has cost them, by some estimates, up to $20 billion and counting.

It all went pear-shaped when Robinhood restricted trading in several securities – including GameStop – at the height of the turmoil, leading to accusations of being in league with the wealthy Wall Street elites they claimed to rally against. Calls for an enquiry, led by U.S. Representative Alexandria Ocasio-Cortez, have been growing louder as anger over the perceived unfairness reached fever pitch on Friday.

But amongst the chaos, confused investors began to target a Notts-based society celebrating the legend of Robin Hood. The World Wide Robin Hood Society, which promotes the tales of the Sherwood Forest hero and his band of merry men, gained 33,000 new Twitter followers in the space of 24-hours. To put that in context, it had just under 400 before this all kicked off.

The society tweeted: “Lovely to have all these new followers... can we just check that you know that you’re following The World Wide Robin Hood Society in Nottingham and not the Robin Hood App… If so... a big welcome from Sherwood”.

But this just led to an even bigger jump in popularity, and the page is currently sitting pretty at just over 60,000 followers. In fairness to their social media person, who must have had an absolute mare of a week, they’ve rolled with it perfectly, and have somehow emerged as the unofficial mascot of one of the craziest weeks in Wall Street history. 

While the outcome of the GameStop short controversy is yet to be determined, you can keep an eye on how the good folks at the World Wide Robin Hood Society deal with the aftermath on their Twitter

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