After raging against hedge funds that shorted GameStop, the “apes” shifted their ire to discount brokerage Robinhood Markets Inc, claiming it conspired with market-maker Citadel Securities to restrict their trading. “There are those who still refuse to believe an American landed on the moon,” Citadel tweeted in September lambasting “internet conspiracies and Twitter mobs” for ignoring the facts.
Similarly, hardcore AMC shareholders are obsessed with the idea that the mother of all short-squeezes (MOASS) will propel the stock to new, incredible heights. The stock has fallen more 50% since the June peak. Salvation must wait.
No wonder it’s hard for members of the financial elite to come across as authentic to retail investors — witness this cringe-inducing endorsement of Crypto.com by the actor Matt Damon.
Attracting ordinary investors can also backfire, as billionaire hedge fund manager Bill Ackman discovered this year when his $4 billion SPAC, Pershing Square Tontine Holdings Ltd., announced and then abandoned buying a stake in Universal Music, much to Reddit’s chagrin.
But that hasn’t stopped establishment figures from trying to co-opt the retail wave for their own purposes: After all, the rewards can be huge.
Nobody has pulled this off better than the crypto-touting, master of memes Elon Musk. “If you drew a Venn diagram of every major financial theme in the past decade then you’d find Musk in the middle,” says Atwater. “Normally you can’t be folk hero and the richest person in the world, but he’s done a masterful job of selling people the dream they wanted to buy, at least for now.” And Musk seems very aware of his power.
AMC boss Adam Aron embraced the “apes” and saved his company by selling more stock. Since then the cinema chain has jumped on seemingly every populist investing trend, from accepting meme coin Shiba Inu (SHIB) as payment to issuing NFTs.
Cathie Wood’s futuristic pronouncements made her a star on social media and sucked more cash into her risky Ark Investment Management strategies.
And former Facebook executive Chamath Palihapitiya parlayed anti-establishment rhetoric into a portfolio of SPACs — the “poor man’s” private equity, with as many egregious fees.
Politicians are catching on too. Donald Trump’s digital media venture struck a SPAC deal that seeks to harness the same tribalism he nurtured and exploited as president. So far, the price has risen five-fold. El Salvador’s “millennial authoritarian” president Nayib Bukele was embraced by the crypto crowd after he declared Bitcoin legal tender. When crypto prices crashed in early December, the head of state informed his social media followers that El Salvador was buying the dip...
As we neared the end of 2021, crypto, unprofitable tech and the meme stocks have all sold off, hurting retail portfolios. With persistent inflation bringing forward expectations of interest rate hikes, Wood’s Ark funds and Palihapitiya’s SPAC bets were among those caught in the downdraft.
