EDITOR NOTE: CNN contributor Chris Cillizza may stand with a heavy lean toward the liberal side of things, but he does have a point here that we’d like to phrase in the form of a question: once you “stick it to the man,” so to speak, or once you’ve screwed the “elites” in their own game, where do you go from there? So, the subreddit swarm successfully raided certain “overvalued” stocks in addition to the “undervalued” silver market. It was a short-term shock to the system; a burst of violence on the contested turf of speculative valuation. Nevertheless, the swarm remains what it is--amorphous and heterogeneous. True, it was something of a populist revolt reminiscent of the January 6 capitol storming. And given the FOMO element among the crowd, it did have a bit of “mob mentality,” particularly among those who held on to GameStop stock, not realizing why they felt so much conviction, other than delivering a symbolic middle finger to Wall Street, as their GME stock valuations found its way back down (possibly with a major loss). But overall, the symbolic power of the swarm was more striking than any of its “functional” power. Its message to the Wall Street “elites” (however you define that term) resounds: no institution, no matter how powerful or large, can withstand the sting of a swarm of hornets without enduring pain or injury. And the GameStop surge that happened last week serves as an introduction to a phenomenon that can and likely will happen again.
At the core of Donald Trump's angry populist appeal was -- and is -- this sentiment: The elites think they know better than you. They think they can tell you how to live and what to believe. But guess what? We the people are smarter than the elites!
Trump elucidated this argument in its purest form at a rally in North Dakota in 2018 when he went on this riff:
"I meet these people they call them 'the elite.' These people. I look at them, I say, 'That's elite?' We got more money, we got more brains, we got better houses, apartments, we got nicer boats, we're smarter than they are, and they say they're elite? We're the elite. You're the elite. We're the elite."
"So I said the other day, let's keep calling these people—and let's face it, they've been stone-cold losers, the elite, the elite—so let them keep calling themselves the elite. But we're going to call ourselves—and remember you are indeed, you work harder, but you are indeed smarter than them—let's call ourselves from now on the super-elite. We're the super-elite."
What made Trump's argument so potent, politically speaking, is that he wasn't just calling out the elites. He was saying that Average Joes needed to rise up and actually show them how wrong they were -- that voting him for him was the best way to express their anger and frustration with the condescension of their alleged bettors. Donald Trump offered himself up as a collective middle finger to the elites. And he won.
All of which brings me to the current -- seemingly inexplicable -- stock surge of GameStop, the video-game seller that has made its money over the years thanks to its locations in malls.
The origins of the surge are in the prevalent belief among Wall Street sharps -- professional investors -- that GameStop's stock, even before this recent spike, was overvalued. After all, shopping malls are in a long decline -- "Malls are doomed: 25% will be gone in 5 years," read a CNN headline in 2017 -- that has only been exacerbated by the Covid-19 pandemic.
As a result of the belief among the pro investor crowd that GameStop was, essentially, doomed, they began shorting the stock -- essentially betting on it to fail. This happens all the time to a variety of stocks with very little fanfare. It is the way of the modern stock market.
Except that this time, amateur investors decided to revolt against the pros. Using Reddit -- and a subreddit known as r/wallstreetbets -- the amateurs began a coordinated effort of buying GameStop stock to drive its price higher and higher. (It's worth noting that Reddit was also a gathering spot for some of the most ardent Trump supporters in 2016.)
That effort to screw the pros -- people with a short position on a stock that is surging have major vulnerabilities the higher the stock goes -- got an unexpected boost from none other than iconoclast-in-chief and Tesla founder Elon Musk, who tweeted "Gamestonk!" with a link to the "wallstreetbets" subreddit on Tuesday.
(Musk has also been a longtime critic of social media censoring and was a prominent Covid-19 skeptic. Sound like anyone else we know?)
And there's no question that the populist revolt has worked for GameStop stock. On December 28, it was trading at $20.99 a share. On Wednesday, it was a shade under $335 a share.
What's the end game for the GameStop surgers? Like, now that they have proven the point that they can take a stock that the pros have declared moribund and revive it -- at least for a moment -- what do they do now? Because they don't really believe that GameStop is suddenly the new Amazon or Apple or Google. It's still mostly a business that derives its value from brick and mortar stores in malls. Which, again, is not exactly a big growth area in the coming years.
The point is that there is no real point beyond showing up the pros -- proving to them that they aren't as smart as they think they are and that they don't have the ability to control everything.
Which, again, has its roots in Trumpism. The entire notion of Trump's candidacy and presidency was to stick it to the elites. And then, well, uh, there wasn't really a plan beyond that. The screwjob was the point. (Montreal screwjob reference!)
That strategy -- if that is even a word that can be associated with what this is -- has massive limits. Sticking it to the man will only get you so far. It's not a solution to any problem. It's just a way to express frustration, anger and a feeling of helplessness.
Think of it this way: Giving someone the finger might make you feel good in the moment. But it doesn't solve anything.
Originally posted on CNN