Meme Stock Vigilantism: A Quasi-Property Rights Approach

Abstract

The meme stock saga upended established rules of the game on Wall Street. In the process, what emerged from the saga was what can be characterized as a form of self-help or vigilantism. The vigilantes in this saga were the small investors who rallied against their targets, the large hedge funds. This article examines the treatment of self-help and vigilantism in the law. Self-help is not the norm in the law, but there are situations where it is allowed or even encouraged, especially when vindicating threats to property or life. The key question in the meme-stock saga is what property was being protected by the investors that got them riled up? We argue, analogizing to the INS v AP case recognizing a quasi-property right in ‘hot news’, that the investors had a legal unenforceable quasi-property in ‘hot opinions’ regarding the financial health of the meme-stock companies. Because this quasi-property right is not recognized in the law, the only recourse the investors had was to engage in self-help or vigilantism. This explains the morally righteous and vitriolic tone that permeated the various online forums where these investors congregated.

Keywords: Meme Stocks, Investor herd behavior, Securities, Self-help, Vigilantism

JEL Classification: G38, G14, K22