Retire or get retired: Stocks, memes, and desperation capitalism on r/WallStreetBets

Abstract

There is growing discontent with the financial services industry. The roots of these feelings are old but have expanded during the 2008 financial crisis and were enhanced by the COVID-19 pandemic and its associated cost of living crisis. This has given rise to the concept of “desperation capitalism”, where individuals are resorting to high-risk measures to try to achieve economic security. This research paper presents new insights into desperation capitalism and its participants through an exploratory case study of the r/WallStreetBets community on Reddit. The case study asks: how does social media impact the behaviour of retail investors? Drawing on multiple sources of primary and secondary empirical evidence, the paper makes two core contributions. First, the paper offers an initial conceptualization and model for understanding the phenomenon of “desperation capitalism”. Second, the paper demonstrates how the decision-making processes of retail investors can be influenced by social media.