By Thornton McEnery
It has been a decade since a group of protesters filled a small, private, grassless park in lower Manhattan and began a weeks-long occupation meant to draw attention to economic inequality and the hegemony of Wall Street’s financial firms.
The fury that the Occupy Wall Street movement targeted at investment banks, hedge funds and fat cats in general is no longer being communicated via bullhorns, rhythm sticks, free libraries and patchouli-scented lists of grievances for JPMorgan Chase’s CEO Jamie Dimon. Because 10 years later that populist rage can be found inside the stock market, where retail traders have picked up the baton to wage a very different, and more efficacious, sit-in on Wall Street, within the digital realm.
For almost two months, the 33,000-square-foot Zuccotti Park became an epicenter of the post-financial-crisis debate in America.
The self-identified “99%” spent those weeks obstinately making the point that 1% of the world’s population controlled outsize wealth and that the U.S. financial system had become a catalyst and source for the ever-widening gap between the haves and have-nots.
When the New York Police Department cleared the final Zuccotti protesters on Nov. 15, it informally put an end to Occupy Wall Street, but the hoses that scoured the shiny black pavement, aiming to wash away the grime, didn’t quash the movement.
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It merely shifted it to the digital realm, with protesters resurfacing in a new tech culture built on “borrowing” and sharing; the political careers of Elizabeth Warren, Bernie Sanders and Alexandria Ocasio-Cortez among others; and the well-phrased, if not totally coherent, call to “democratize Wall Street.”
Just log on to Reddit to behold the new Zuccotti, where individual investors are educating each other on market structure and using meme stocks to send Wall Street a message that they believe the system is still rigged and are going to do something about it this time.
Arguably at the center of this Occupy 2.0 are such heavily shorted stocks as GameStop /zigman2/quotes/203755179/composite GME +14.04% , AMC Entertainment /zigman2/quotes/200235402/composite AMC +4.36% , Clover Health /zigman2/quotes/217322673/composite CLOV +4.17% , BlackBerry /zigman2/quotes/202784246/composite BB +3.55% and a roster of others that online communities have gravitated toward, as a new method of protest has taken shape in 2021, with the COVID pandemic still running in the background.
MarketWatch data: The most heavily shorted stocks
Throngs of investors on social-media platforms like Reddit and Discord are instructing each other as to how they might be able to fight back against hedge funds, which have been blamed for shorting companies to near-death, leaving them as carrion for private-equity firms.
Much like the protesters in Zuccotti a decade ago, who carried signs with caricatures of Wall Street CEOs whom they held in low esteem, today’s Reddit retail traders use memes and effigies of unloved corporate executives as war banners in a new battle against the 1%.
Some of the faces have changed. Instead of then–Goldman Sachs /zigman2/quotes/209237603/composite GS -0.36% chief Lloyd Blankfein, Ken Griffin of Chicago-based Citadel is the primary recipient of social-media vitriol, such that Twitter searches for “Kenny G” now result in an odd mix of alto saxophone and allegations of naked shorting.
And like “the People’s Library” that sprouted up in Zuccotti, a free depository of thousands of books under a tent gifted by punk-rock priestess Patti Smith and designed to help the protesters educate themselves on the things they were railing against, Reddit boards have become the home for “DD”: due diligence or deep-dive posts into financial topics and stock tips meant to help retail traders keep each other on the bleeding edge of their campaign to topple hedge-fund honchos.
These posts, which range in quality and coherence in ways not too dissimilar to Wall Street analyst reports (if often written with more prurient panache), have launched short squeezes on everything from Wendy’s /zigman2/quotes/204070192/composite WEN -1.56% to the uranium market .
And like the protesters who constantly tried to push their borders beyond Zuccotti and into the offices of banks or across the Brooklyn Bridge, individual investors have already marched on to the options market. According to Robinhood’s first quarterly report as a publicly traded company , options trading on the zero-commission app had almost tripled in the first half of 2021 compared with the entirety of 2020.
So, while the volume of individual investors fighting hedge funds appears to have shrunk from that of January, those who remain are getting more active and more educated, and gaining more attention from politicians and regulators as they do so, even causing SEC Chairman Gary Gensler to declare this week that they have every right to use their own money to try to “smash” hedge funds.
There is, however, one way in which the Occupy protesters of 2011 and the Reddit raiders of 2021 differ: The NYPD could move to clear Zuccotti Park in a day, but individual investors hellbent on pointing out structural flaws in the stock market are already inside the stock market, and they don’t appear to be leaving soon.