Social Media, Securities Markets, and the Phenomenon of Expressive Trading

21 Pages Posted: 27 Apr 2021 Last revised: 5 May 2021

See all articles by John P. Anderson

John P. Anderson

Mississippi College School of Law

Jeremy Kidd

Mercer University - Walter F. George School of Law

George A. Mocsary

University of Wyoming College of Law

Date Written: April 26, 2021

Abstract

Commentators have likened the recent surge in social-media-driven (SMD) retail trading in securities such as GameStop to a roller coaster: “You don’t go on a roller coaster because you end up in a different place, you go on it for the ride and it’s exciting because you’re part of it.” The price charts for GameStop over the past few months resemble a theme-park thrill ride. Retail traders, led by some members of the “WallStreetBets” subreddit “got on” the GameStop roller coaster at just under $20 a share in early January 2021 and rode it to almost $500 by the end of that month. Prices then dropped to around $30 dollars in February before shooting back to $200 in March. But, like most amusement park rides that end where they start, many analysts expect market forces will ultimately prevail, and GameStop’s share price will soon settle back to levels closer to what the company’s fundamentals suggest it should. Conventional wisdom counsels that bubbles driven by little more than noise and FOMO—fear of missing out—should eventually burst. There are, however, signs suggesting that something more than market noise and over-exuberance is sustaining the SMD retail trading in GameStop.

There is evidence that at least some of the recent SMD retail trading in GameStop and other securities is not only motivated by the desire to make a profit, but rather to make a point. This Essay identifies and addresses the emerging phenomenon of “expressive trading”—securities trading for the purpose of political, social, or aesthetic expression—and considers some of its implications for issuers, markets, and regulators.


Keywords: gamestop,expressive trading,securitiesfomo

Suggested Citation

Anderson, John P. and Kidd, Jeremy and Mocsary, George A., Social Media, Securities Markets, and the Phenomenon of Expressive Trading (April 26, 2021). 25 Lewis & Clark L. Rev. (Forthcoming 2021), Available at SSRN: https://ssrn.com/abstract=3834801 or http://dx.doi.org/10.2139/ssrn.3834801

John P. Anderson (Contact Author)

Mississippi College School of Law ( email )

151 East Griffith Street
Jackson, MS 39201
United States

Jeremy Kidd

Mercer University - Walter F. George School of Law ( email )

1021 Georgia Ave
Macon, GA 31207-0001
United States

George A. Mocsary

University of Wyoming College of Law ( email )

P.O. Box 3035
Laramie, WY 82071
United States

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