Activist Retail Investors and the Future of Financial Markets : Understanding YOLO Capitalism

"Contemporary financial markets have been characterized by sociocultural phenomena such as "meme stocks", the Gamestop short squeeze, and "You Only Live Once (YOLO) trading". These are movements led by small-scale retail investors banding together to participate forcefully in financial markets through decentralized but coordinated actions. This book deploys many different subdisciplines to explore the recent 'power grabbing' of retail investors and the online environment that enables them to join the ranks of major financial players, and participate in contemporary capitalism. It offers multiple perspectives on the genesis, role, motivations, power, and future prospects of retail investors as a force in contemporary financial markets. Drawing upon the insights of authors hailing from many different countries, the book frames YOLO capitalism through numerous angles that help to explain the context and the importance of activist retail investors in modern financial markets, and thereby explore the possibilities of a transformed financial future with much wider small-scale participation. The book assesses the potential of online - and other - communities in enabling global coordination in impacting or even driving financial and crypto markets, and the challenges that come with it and weighs the competing narratives both positive and negative regarding YOLO capitalism. It strikes a balanced assessment of their legal, cultural, behavioural, economic, and political roles in modern finance. This book will be of interest to a multidisciplinary and interdisciplinary audience of scholars in financial markets, financial regulation, political economy, public administration, macroeconomics, corporate governance, and the philosophy and the sociology of finance"-- Provided by publisher Cover Half Title Series Title Copyright Dedication Contents About the Editors About the Authors Acknowledgments List of Tables List of Figures Appendices Acronyms Timeline 1 Introduction Background Overview of This Book Concluding Remarks Part 1 Retail Investors as Drivers, Creators, and Mediators of Value 2 Public Value Theory and YOLO Capitalism Introduction Civil Society as Driver of Value Measuring and Ascribing Public Value GameStop Short Squeeze and the Reddit Rebellion Embodiment of Values (Re)measurement and (Re)appropriation of Value Public Managerial and Political Responses Strategic Triangle Conclusion 3 Happier than Ever: The Role of Public Sentiment in Cryptocurrencies, Meme Stocks, and NFTs 2021: Year of the NFT? Affect and Populism in Political Theory A Pandemia of Fear and Greed: Sentiment, Mood, and Interest in Finance Planet of the Apes: NFTs and the Celebrity Culture Conclusion Acknowledgments 4 GameStop, WallStreetBets, and Capital as Power Introduction Setting the Stage for the Surge The Gathering Storm Capital as (Social) Power Conclusion 5 Speculative Behavior and Expectations in Economic Turmoil: A Keynesian View Introduction Decline in Investors’ Relative Knowledge Animal Spirits The Tyranny of Experts Conclusion 6 Memes as Cultural Artifacts: YOLO Investors, Degeneracy, and the Memeified Economy Introduction “I Am Not a Cat”: Behind the Scenes at r/WallStreetBets The Meaning of Memes Memes and Common Sense Memes Bridge Divides Conclusion Part 2 Retail Investors as Activists, Renegades, and Disruptors 7 Narrative Economics and YOLO Investors: r/WallStreetBets and the GameStop Short Squeeze Introduction The Arrival of the YOLO Investor Narrative Economics and Meme Stocks Going Viral Online Fora as Information Distributors Online Forums as a Disciplinary Tool Regulatory Reactions to Online Outlets Conclusion 8 The Behavioral Biases of Cryptocurrency Retail Investors: Lessons from ICOs Introduction Heuristics and Biases Personality Traits Methodology Results Descriptive Results Personality Traits and Behavioral Biases of ICO Retail Investors Analysis of Investor Satisfaction for ICO Investments Discussion Impact on Other YOLO Investment Classes Conclusion Limitations and Future Research Acknowledgment 9 FOMO in Digital Assets Introduction Fear of Missing Out in ICO Markets Empirical Estimator Specification Data and Methodology ICO Organization Retail Investor Survey Data Empirical Strategy Results Conclusion 10 Is a Trader a Trader, No Matter How Small? Introduction One: Financial Education Two: Toying with Money Three: Policy Implications Four: Around the World Concluding Remarks 11 Social Movements in Contemporary Political Economy: Lessons from YOLO Retail Investors Introduction The GameStop Experience: Social Movement Parallels Participation, Motivation, and Regulation: Broader Reflections from a Contemporary Political Economy Perspective Conclusion 12 Retail Investors and Anti-system Politics Online Two Weeks in January Transformations in the Broader US Economy and Society Accelerating Social Inequality in the Pandemic The Sociology of Anti-system Politics Conclusion 13 Counter-hegemonic Finance: The GameStop Short Squeeze Introduction One: On Gramscian Aspirations Two: The Shadow of 2008 and Occupy Wall Street Three: The Gramscian Lens for the GSS Conclusion: The Counter-hegemony of the Apes? 14 Conclusion Conclusion: On YOLO Capitalism Key Lessons Activist Retail Investors Suffer from Many Biases Some Activist Retail Investors Are Bounded by an Ethical Calculus or Moral Directive YOLO Capitalism Is a Living Social Phenomenon Activist Retail Investors Are a Symbolic Society in Leisurely Pursuit Activist Retail Investors Remain Nestled within Capitalism’s Logic Limitations Future Areas of Research Final Words Index