Shaping collective action in financial markets through popular expertise: An analysis of Due Diligence posts on WallStreetBets

Yves Gendron, Alexandre Madelaine, Luc Paugam () and Hervé Stolowy ()
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Yves Gendron: Université Laval
Luc Paugam: HEC Paris
Hervé Stolowy: HEC Paris

No 1552, HEC Research Papers Series from HEC Paris

Abstract: In 2021, a social movement rallying retail investors unexpectedly shocked Wall Street, forcing a prominent multi-billion-dollar hedge fund to shut down one year later, after incurring massive financial losses. Social movements in financial markets have significantly developed in the wake of the 2007–09 financial crisis, resulting in the emergence of various collective actions. We analyze one recent example of such action undertaken by the r/WallStreetBets (WSB) community on Reddit, which disrupted the stock prices of several “meme stocks” (e.g., GameStop) by disseminating influential investment narratives. We analyze the 150 most upvoted Due Diligence posts on WSB and interview eight members of its community. We find that a popular expertise in investment narratives emerged, developed, and was propagated on this digital platform. WSB authors’ claim to popular expertise is made in a hybrid language combining traditional financial expertise with an accessible and entertaining writing style, complemented by references to pop culture. Our analysis brings out a growing resentment among retail investors about the unfairness of financial markets, and its role in mobilizing them for collective action that challenged the existing order of things. Yet this widespread resentment did not spontaneously translate into a meaningful, sustainable collective action initiative. Our thesis is that the development of popular expertise played an instrumental role in the formation of WSB’s collective action initiative targeting several perceived investment opportunities.

Keywords: Collective action; Digital platforms; Fairness in financial markets; Popular expertise; Social movement; WallStreetBets (search for similar items in EconPapers)
JEL-codes: G10 G41 M40 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2025-03-03
New Economics Papers: this item is included in nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1552

DOI: 10.1016/j.aos.2024.101588

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