By now, there’s a good chance you’ve heard what’s been happening with GameStop’s stock surge. Majorly simplified: Everyman retail investors are using Reddit to spread the word and help boost the stock price of video game retailer GameStop (as well as some others), causing a few Wall Street hedge funds that had heavily shorted the stock to lose millions.
The Reddit crew are essentially “playing the metagame” — a term used in role-play video games when players strategize outside of the rules of the game, says Joost van Dreunen, who teaches the business of video games at the NYU Stern School of Business.
“Retail investors do the same thing,” van Dreunen says. “It has nothing to do with the fundamentals of the actual GameStop company, they’re just playing the financial metagame.”
And the world can’t look away. So what are the psychological reasons behind the phenomenon? Here, experts offer potential explanations.
People want to feel agency…
The narrative many are promoting about the GameStop frenzy is that small retail investors are sticking it to “big evil Wall Street,” says Kelly Shue, professor of finance at the Yale School of Management.
Though that’s not what is actually happening, the story is applealing because there is a lot of pent up anger and frustration around the power structure that the financial industry perpetuates, says Sarah Newcomb, director of behavioral science at investment research firm Morningstar.
Some users of WallStreetBets (the subreddit community that helped trigger the GameStop surge) describe the pain that they and their families endured during the 2008 financial crisis and highlight how professional investors were never punished, Shue says.
“It hasn’t really escaped anyone that over the last decade or so, there’s been this persistent favoring favoritism towards large institution financial institutions at the expense of everyone else,” van Dreunen says.
So, it’s not surprising that this has turned into a “rallying cry for the little guy,” Newcomb says. “The problem is the little guy is probably still going to get squashed in this situation.”
…and nostalgia
“I think there is a cultural and kind of class element to this,” Shue says.
As one Reddit user wrote on the subreddit WallStreetBets: “For the past two weeks, the pro-GameStop investors have shown great interest in the potential turnaround story of a store that plays a big role in their childhood memories.”
GameStop is a brick-and-mortar retailer that many young people grew up with, but that had been declining in recent years. “GameStop is sort of written off” as something that can’t compete with Amazon, van Dreunen says. (Other stocks that were targeted include BlackBerry, Blockbuster and Nokia.)
So “[n]ostalgia becomes a reason to do these things,” digital culture expert Jamie Cohen told Time. “They see this as like the last gasp of a troll. You can’t save a GameStop, you can’t probably save Blockbuster, but what you could do is kind of play around with it before it expires.”
That kind of nostalgia is appealing: Research has shown that nostalgia can combat loneliness, because it reminds us that we have social support and counteract feelings of boredom.
It feels like an opportunity to get rich quick
For regular people, the GameStop hype looked like an opportunity to break past barriers that exist in the way of making money. Some people perceive it like winning the lottery, Newcomb says.
People who were able to get in on the Gamestop squeeze early and get out in time to make money have been posting stories on social media about what they’re doing with the windfall, from paying off debt from loans to planning for a wedding.
“Money represents your opportunities and options in life,” Newcomb says. “When faced with a narrative that says, ‘you could have all your dreams come true overnight,’ a lot of people are going to jump at that.”
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