Social Media Events and Financial Bubbles: r/wallstreetbets and Gamestop — Exceptionally Mediocre

There is an explicit link between the boom and bust cycles that we see on the stock market and the rise and fall of viral social media events. In a sense we see ‘event bubbles’ in which something will shoot up the trending feeds on social media, resulting in an increase in production of content related to that event. The surge in production of these content commodities coincides (and reinforces) a rise in consumption of that content. Like a financial bubble, the event eventually becomes overvalued with the consumption of that particular event becoming artificially inflated beyond its normal status. This will eventually reach a critical mass where interest in the story wanes, social media algorithms begin to priories newer stories, eventually dragging the event back into oblivion. Like a financial bubble collapsing as everyone tries to sell but no one is willing to buy, because its essentially yesterday’s news (and there’s another story brewing in the background)[1].

Social media arose out of a need to absorb the outpouring of libidinal energies in the early days of the internet[2] [3], by utilising forms of governance developed in the financial sector[4]. The real world implications of this is that ‘events’ are traded on the stock market of social media, hamstringing any attempt at sustaining any long term discourse due to sheer lack of attention[5]. Social media platforms are the ones who benefit form this, ensuring continued high levels of engagement. Imagine if the global stock market had an overbearing entity that benefited directly from any and all trading that occurred, thats social media. The design of social media to keep us ‘trading’ in order to sustain the volume of engagement that provides it with the data it requires to survive[6]. Essentially our global media discourse is vulnerable to the same volatility as the stock market. What is perhaps even more important is that these structure are able to assign not only value to individual posts but the value of entire ‘events/narratives’. If we are looking for mechanisms by which capital subsumes all forms of resistance — this is arguably one of the most important ones in the global north.

What is so interesting about the r/wallstreetbets GME ‘event’ that is happening at the moment is the collision between these two volatile market systems. The sudden increase in attention directed by social media towards a particular area of the stock market that the stock market, has disrupted the normal functioning of financial entities. In this case, business as usual consists of crushing a company that employs real people into the ground just because they have the leverage to do it. Now the tables have been turned, and the inverted bubble that Melvin were trying to create has come up against the ‘event’ bubble of social media. Because social media overdetermines what is news there has been a huge ripple effect, leading to other larger financial actors to intervene (both in favour of and against Melvin capital).

One of the consequences of this is the complete lifting of any facade that the market operates rationally and therefore determines an objective (if floating) valuation of particular financial products. More importantly we can see how social media, regardless of how much it overdetermines cultural production, cannot contain every outburst. Nothing is infallible or invincible, something has to give. The event bubble has spilled out past the confines of social media into the financial sector. We are witnessing one of the first ‘social media event/finance sector’ bubble, that is being sustained by a sheer hatred towards the vampires (hedgefunds). If you take the time to read through the comments sections of r/wallstreetbets you see the vehement hatred at the people who caused the financial crash of 2008, and the sheer joy at the opportunity to grind just one single hedgefund into the ground. There are people on the subreddit who struggle to pay rent, who’ve invested in GME because ‘fuck those guys’. There is a sentiment that regardless of how much money they might lose, as long as the hedge fund goes bust it will all be worth it. It’s not a financial bubble sustained by a psychology of profit making; its sustained by a discontent that has bubbled beneath the surface with no outlet till now.

While I in no way think this will trigger the revolution, this is perhaps one of the most explicit examples of how the systems set up to empower factions of capital are not full proof, and it is indeed possible to breach the walls. We are witnessing the attempted hijacking of one faction (social media) of capital’s technology in order to turn the proverbial guns on another faction (hedge funds) and blast them to bits.

[1] Gilroy-Ware, M. (2017) Filling the Void: Emotion, Capitalism and Social Media. London: Repeater.

[2] Gehl, R. W. (2014) Reverse engineering social media: software, culture, and political economy in new media capitalism. Philadelphia, Pennsylvania: Temple University Press.

[3] Seymour, R. (2019) The Twittering Machine. London: The Indigo Press.

[4] Arvidsson, A. (2016) Facebook and Finance: On the Social Logic of the Derivative. Theory, Culture & Society. [Online] 33 (6), 3–23.

[5] Seymour, R. (2019) The Twittering Machine. London: The Indigo Press.

[6] Fuchs, C. (2012) The Political Economy of Privacy on Facebook. Television & New Media. [Online] 13 (2), 139–159.

Originally published at https://exceptionallymediocre.uk on January 29, 2021.

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Milo Mirzai

Interested in the intersection between technology, politics and culture. Global Political Economy. Critical Theory. Marxist.