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How often do we read about middle income individuals appropriating the wealth from the super-rich using the very systems that they have created in order to become and stay wealthy? Not very. So when it did happen last week at the New York Stock Exchange, everyone sat up and took notice. Not least of all the wealthy who, some would say, are whining that this form of “free market” is against the wealthy!

A simple search on the internet will provide multiple articles explaining what happened like this one by Huffpost. GameStop is a brick-and-mortar enterprise which was already losing market share to online stores and the pandemic hurt them further. A few Hedge Funds, including Citron Research and Melvin Capital, saw an opportunity and decided to short the company’s stock to make money. Members of a popular community on Reddit dedicated to the stock market for retail (individual) investors, called WallStreetBets, found out about this. Led by Keith Gill, they started buying the stock resulting in an increase in its value on the exchange, causing a short squeeze for the Hedge Funds and losses in billions of dollars.

For me, the main takeaway is how technology has allowed retail investors to do what hedge funds have been doing for years – legally manipulate the stocks to make millions of dollars at the expense of others. This was facilitated by two tech platforms in particular. Reddit (specifically the chat room WallStreetBets) provided the forum for the retail investors to discuss and coordinate the action, so that together they had enough funds to match the deep pockets of the hedge funds. Free trading apps (like Robinhood) which are used by amateur investors for trading on the stock market. The rest, as they say, is history. 

Some have called this the David and Goliath story, others decided to have a laugh at the expense of the hedge fund moguls but one of the most popular trading apps, Robinhood, ironically decided to crash the party by blocking buying of GameStop stocks (and a few others). Ironically because Robinhood took from the rich and gave it to the poor! It seemed like the “free market” was suddenly too free for these platforms and they wanted some self-regulation to reign in this ‘free for all’. This drew strong criticism from across the political spectrum – I have never before seen Republican Senator Ted Cruz agree on any topic with Democratic Representative Alexandria Ocasio-Cortez, that too without any debate or discussion!

For me, this is a good example of how technology, when used effectively, can help take the power into the hands of the people – it can be leveraged to deepen democracy and people’s participation in decision making. It is a sharp contrast to what is happening in our country where technology is being used to launch surveillance on the citizens, which stifles democracy and disempowers the people.

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