Wall Street and its characters – on or off the stage – have always held a certain elevated status in the eyes of America. Whether it’s Warren Buffett or Michael Burry (i.e. Christian Bale in The Big Short), these are personas we equate with immense wealth, foresight and the ability to weather the highs and lows of the stock market for their own personal gain.
But forget about Buffet and Burry – these guys are so yesterday. Now, it’s users on Reddit’s WallStreetBets, carrying names like RoughCarrot, Codeine_dave, hotsauceislethal and UltraTunaMan. They’re taking down the titans. They’re making (or losing) lots of money. They’re playing a game that’s made for the big screen (or, actually, more like Tik Tok).
You couldn’t dream this stuff up. But it’s real. And it actually has some implications for brands going forward. Here’s the dish.
This is a story about short-selling that we’ll try to keep short (har, har). The reality is, you can find a zillion articles on the recent WallStreetBets/GameStop/AMC/BlowUpTheHedgeFunds event. But a synopsis would go like this:
- A bunch of hedge funds decide to bet against stocks like GameStop for some really legitimate reasons
- More than a bunch of Redditors on the subreddit WallStreetBets get angry and pile into the stock – proclaiming that they will take it “To the moon!” – via the trading app, Robinhood
- The hedge funds lose lots of money as the stock skyrockets
- Some Redditors make lots of money, Robinhood has to shut down stock trading, GameStop’s stock drops from its highs, people get angry, many lose money, Robinhood user growth explodes even further despite all the anger, regulators are completely perplexed about what to do, and yeah, it’s basically all a mess
To put it simply: Kids today hate hedge funds with a passion, mobilize en masse via social media to take revenge, get-rich-quick stories abound throughout the news media, and you, dear marketer ask: What the heck does this have to do with me?
Here’s What You Need to Be Thinking About
If you’re reading this, you’re likely not going to be one of the hedge funds that could be targeted for a future financial takedown, or one of the companies on the cusp of failure who somehow profits from the social media mob’s whims and woes. So, this isn’t about how to not be taken down by Robinhood traders. It’s about some of the broader societal trends that WallStreetBets signals.
Trend 1: Insert Your Dis- Here
Disillusion. Disaffection. Disappointment. Distress. Pick your dis–, and there’s a whole bunch of people who are feeling that right now, for a whole bunch of reasons. In a recent New York Times piece about the GameStop story, a high school senior named Jacob Chalfant, who took part in the Reddit trading-craze, said:
“We’re living in a system where there’s no such thing as justice anymore and the entire world is falling apart,” Mr. Chalfant said. “Nothing really matters, so we might as well try to have fun while we’re here.”
That’s a really scary quote – but given the world we live in today, it makes sense why a lot of people feel that way right now.
In essence, the Reddit traders are doing something as old as Father Time – they’re challenging the system. And that means that challenger brands have the potential to gain in this environment. Be the little guy that stands with the other little guys – the David against the Goliath. Point to what the market leaders are doing and show how you’re disrupting them. Set yourself apart in every single message you put into the market. If you’re disrupting, and if people know about it, chances are that they are going to want to support you in that disruption.
Trend 2: Beware the Social Media Mob
The social media mob is … a thing. Millions of people with nothing to do but avoid Covid at home and disrupt your business from their computer screens are sitting there, waiting for an excuse to let out some of that anger and frustration at your brand. Is it likely to happen? Maybe not. But if it does happen – you’re close to dead in the water. Here’s what you can do about it.
First off: Devote dollars and time towards building your corporate reputation. Give back to charity. Support the environment. Find ways to help eliminate some of the inequities in society. Not only will you be doing good, but you will be building goodwill. And every inkling of goodwill is a brick in the dam that will keep the floodgates from opening.
Second off: Devote more dollars and time towards your social media efforts. You need to be playing in the tinderbox. Build processes around crises. Figure out how you’ll respond in the face of criticism. Cultivate evangelists who will come to your defense. The last thing you want is to have an explosion online with no way to mount a defense.
(TLDR: Don’t be like the hedge funds.)
Trend 3: What’s Next is Scarier Than What’s Now
The really scary thing isn’t what’s happening in the stock market. It’s what happens next. Many have attributed the frothiness in the market and the trading activity of “average Joes” to the 2001 dotcom bubble. And when a bubble bursts, a whole lot of people get hurt. Even more sadly, the average Robinhood user is 27 years old. So, a whole lot of young people are potentially about to get hurt.
With the bursting of a bubble, the hope is that the short-term financial damage leads to long-term psychological gain. A return to our senses. A newfound, healthy risk-aversion. A focus on financial discipline and management.
If you’re in the financial services space, there are two words you should be focused on: Financial literacy. If you’re outside the financial space, get ready for another wave of disruption – as if we haven’t had enough already. Get ready to be proactive in your messaging about what people are going through. Find ways to help, give back, and tell the world what you’re doing. And hey, please, support your own employees in practicing smart financial responsibility.
We live in a world where people are looking to companies to play a role in the recovery. So get ready to do just that.
The faster the rise to the moon, the harder the fall. It’s up to brands to help as much as possible to make sure that the landing on impact is that much softer.