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WallStreetBets and Why Brands Can No Longer Ignore Factions

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Last week, GameStop stocks surged 400% after the WallStreetBets subreddit shared research on a short by Melvin Capital and coordinated to make purchases that drove up the price of the stock. You probably already knew that, and you probably heard that in response to this, investment apps — but most notably free investment app, Robinhood — came under fire for stopping users from buying shares in GameStop and others.

We’re only a month into 2021 and have already seen conspiracy groups storm the Capitol, retail investors turn the stock market upside down, and anti-vaxxers shut down Dodger Stadium. How? By using the internet and its mechanics to find, influence and mobilize others who share their interest.

WallStreetBets is a prime example of a faction, a group of social media accounts or communities that share a common ideology, passion, purpose, and/or language. These are groups that have learned how to leverage the dynamics and systems of the internet to forward their ideals and causes, and these recent high-profile examples represent their growing ability to have a real financial impact on brands.

In looking at the related GameStop narratives, the WallStreetBets faction is driving more than 30% of the conversation online — typically, 1% indicates a faction is in control of setting the narrative agenda. As with most factions, they’ve found a vulnerability point in the system and will likely exploit it again. Basically, this will not be the last we see of WallStreetBets or any other factions who decide to follow their lead.

More on the faction is in the profile below:

Faction Profile: WallStreetBets (WSB)

Highlights:

  • The most influential faction — ever — observed to date. 
  • Grew from 4.4 million members on January 28, 2021 to 8.2 million on February 2, 2021.
  • Composed primarily of young, male retail investors sharing trading strategies. 

Overview

The community was founded in 2012 by Jaime Rogozinski. His idea was to create a safe place for people willing to take risks and invest in the stock market using more of a gambling than a play-it-safe approach, hence, the name “Bets.” Its members focus on sharing asymmetric investment strategies and believe that the traditional savings/retirement plan is essentially worthless to their generation given current market circumstances (high debt, low wages, high real estate costs). 

Who is a member?

WallStreetBets is primarily composed of young to middle aged, tech-savvy American male retail investors who trade moderate sums in the stock market. Some of the members here have multi million dollar portfolios, giving them more significance and authority in the faction.

What motivates them?

Their philosophy is to share and debate ‘high-risk high-reward’ investment opportunities and support each other with advice through their individual and collective investment cycles. Their original motivation is to make money, and as an apolitical space, accept and attract all political and racial ideologies wanting to achieve that goal. A secondary motive is to create viral moments and to shape culture by crowdsourcing investment advice to participate in and shape the stock market.

What is their culture?

The community is very irreverent — they subscribe to the wisdom of the crowd and celebrate the power of the masses. Users stay very active, posting stock market memes and screenshots of their investment portfolios. They have a mascot and they share a language and jargon: Stocks are “stonks” and winnings are referred to as “tendies” (a play on the word tender) and  celebrated with a plate of chicken tenders. Losses are also celebrated as users encourage each other to take risks.

How do they exert influence?

The community is a well moderated, highly creative, and savvy space with the ability to rapidly deploy its influence across the digital and real world through collective agreement and organization. Self described as: “Like 4chan found a Bloomberg terminal” — If FinTech, BLM, MAGA, Qanon and Bernie Bros all one day decided to join forces to make money, you would get WallStreetBets.