Phew! What a week it has been. I’m sure you must have heard about shares of GameStop, trading at sky-high prices since last week, driven by a Reddit community called r/WallStreetBets.
After sitting around just $18 at the start of January, a loss-making company, GameStop’s stock doubled in four days. Isn’t it raving? This is not enough. It kept shooting higher and reached $347.51 (more than double) on last Wednesday. Then, on Thursday, it gave back a chunk of those gains and finished the day at $193.60, down 44%. But it’s still up an amazing 928% through the first few weeks of 2021.
You can catch up on what happened a few days ago here. Everyone wants to make this a story about something. We’ve heard takes including, “This is the same as the Capital riots; the people have had enough”, “This is the same as Occupy Wall Street”, “This is because of stimulus checks”, “This is a demographic consequence of young men living at home and not getting married” - there have been so many takes. People are now running with different narratives. But fundamentally this isn’t a story about any of those things. It is a story about the power of community.
It’s a historic moment for you, the community rockstars
This is, actually a historic moment for you, the internet, and all the community builders across the globe.
Do you want to know how these Reddit users harnessed the power of the community to defeat GameStop’s hedge funds overnight?
A few weeks ago a user on Reddit in a community “WallStreetBets”, noticed a hedge fund had taken a massive amount of short trades against GameStop. They convinced the community on the thread to buy GameStop stocks, as many as possible. Forcing the short-sellers to lose money instead of making money, because GameStop stock price was going up.
The hedge fund is now declaring bankruptcy their losses have surpassed its worth, which is more than ten billion. The guys on r/wallstreetbets are currently discussing staying prepared for a speculated SEC intervention.
This is the first time the stock market has experienced something like this (and the stock market has a lot of interesting experiences), as we say:
It all comes down to the power of community
During what may feel like the most challenging of times, we’re seeing some of the best of humanity: the power of community during COVID-19 is something to behold. While social distancing separates us physically, the community is serving as a bridge, a means of lifting each other up: neighbours are helping neighbours, brands connecting with their users, like-minded people experiencing the exact same challenges, and giving what they can to those who need it. This is exactly what happened in the Reddit community. This group has always indulged in discussions that are full of ideas for the next trade to jump on.
And if you were following this group closely during all this, you probably already know that they’ve been encouraging each other to keep buying GameStop and push it ever higher, or “to the moon.”
Consequently, the community of common people BEATS the stock market guys at their own game, by coming together for Gamestop. They showed that common people are more powerful than seasoned traders when they decide to unite and come together for a shared purpose. It’s commendable. What has happened in the stock market in the last few weeks is a turning point in world history.
Had there been no community, this would have never become as much of a market event, wild enough to catch the attention of Tesla CEO Elon Musk and venture capitalist Chamath Palihapitiya. Last Tuesday, Musk sent his 43 million Twitter followers a link to a popular Reddit message board that many traders have used to hype GameStop's stock. Palihapitiya, meanwhile, went so far as to say on Twitter that he bought GameStop call options, which is essentially a leveraged bet that its stock price would continue to rise.
With all that is happening around GameStop, one thing is for sure - believers in the power of community are buzzing. Always have been. Always will be.
GameStop < WallStreet < Community
Glynk’s tip 💡
If you observe carefully, you will realize that the magic formula in this entire story is “uniqueness”. The uniqueness of the r/WallStreetBets has led to turn the tables in the stock market, by providing an added value to its members. They tried to be as unique as possible and turned GameStop into an international sensation that has stunned big investment firms on Wall Street and puzzled the trading community around the globe.
It’s simple, when you get the community right, try to be as unique as possible. The benefits would be undeniable. Even if you are a brand and having second thoughts about building a community, just keep this thing in mind:
If you are serious about your growth (which you obviously are), you need to invest in a community - plain and simple.
As we think about the days and weeks ahead, it’s more important than ever to encourage the idea of community. We always have, and always will, believe in the power of online communities.
And finally, this week’s tweet of the week, I mean, there were so many amazing tweets this week. It was hard to choose but I’m gonna have to go with a little GameStop Succession mashup.
That’s it. That’s our take of the GameStop story. And..if you know anyone who is short of time and loves to learn about community building, look no further. Share this now with someone who is going to enjoy it :)
If you want to chat more about this, just say hi by replying to this email! I’d love to hear from you!