A Case Study of Reddit During the Gamestop Stock Crisis
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The increasing presence of online communities in crisis situations: A case study of Reddit during the GameStop stock crisis Alexandru Valentin Beian (20191705) Diana Andra Durdeu (20191734) Aalborg University, CCG, May 2021 Abstract In January 2021 members of r/wallstreetbets, a subreddit of the Reddit community, massively mobilized to buy stocks of an American video game retailer, GameStop, which caused a short squeeze of the stock and major loses for the short sellers. Taking a multi-vocal approach, based on the Rhetorical Arena Theory (Frandsen & Johansen, 2010) we aim to understand the main factors which enabled the online community to mobilize during the GME crisis. To answer this problem, we will conduct our research on two dimensions. The first one explores the macro and micro context which enabled the community to mobilize and the second one looks closer at the particularities of the interactions between community members to better understand how their communication helped them act unified. We conduct our research based on the netnography methodology (Kozinets, 2015), using web documents such as news websites and the Reddit platform to better understand the interactions in the digital environment. The findings of this study showed that two factors facilitated the mobilization of the community. The context in which the events took place allowed its members to start the rhetorical arena of the crisis long before the events of the crisis began to affect the hedge funds in crisis and to remain a dominant voice in the arena until its peak, as the organizations in crisis ignored the potential threat they represented and let them have the communication initiative. The particularities of the interactions between community members are characterized by the mix of the digital aspect of the platform itself and the social relations which helped them act unified. These findings suggest that organizations need to start taking into account the growing role online communities can play in a crisis situation in order to construct better response strategies. Table of Contents 1. Introduction .................................................................................................................. 1 1.1. Problem formulation ..................................................................................................... 3 2. Literature review ......................................................................................................... 4 2.1. Crises and crisis communication .................................................................................. 4 2.2. Rhetorical Arena Theory............................................................................................. 11 2.3. Online communities .................................................................................................... 18 3. Methodology ............................................................................................................... 27 3.1. Approaches to theory of science ................................................................................. 27 3.2. Case study ................................................................................................................... 29 3.3. Rhetorical Arena methodology ................................................................................... 31 3.4. Netnography ................................................................................................................ 32 3.5.Discourse analysis ........................................................................................................ 33 3.6. Limits .......................................................................................................................... 34 4. Data analysis ............................................................................................................... 35 4.1. Macro level ................................................................................................................. 35 4.2. Micro level .................................................................................................................. 40 4.2.1. The voice of the hedge funds ................................................................................. 40 4.2.2. The voice of the online community ....................................................................... 47 5. Conclusion .................................................................................................................. 69 6. Discussion.................................................................................................................... 72 7. Bibliography ............................................................................................................... 73 Appendix ..................................................................................................................... 77 1. Introduction In January 2021, the internet was dominated by the news of the GME stock crisis, an event where the stock of the American video game retailer GameStop suffered a short squeeze, causing major financial loses for short seller. Members of the subreddit r/wallstreetbets, a sub- community of the community Reddit managed to mobilize to buy shares, resisting selling them, thus driving the price of the GME stock by more than 1900% and costing hedge funds billions of dollars (Danielle, March 2021). This case represents a clear example of how the balance of power is being debated in our digital era. If in the past the publics were passive consumers of the content, now they become active participants in the communication processes. The advancement in technology, the evolution of Web 2.0, gave them new tools which completely transformed their communication habits. We are now facing “the rise of the network society” (Castells, 2007) which is capable of mass distribution of information at a global level, with just a click of a button. The digital environment is giving people the power to share information rapidly, in multimodal forms, which can be accessed from any part of the world in any moment of the day, thus bringing people together despite their limitations in time zone differences or physical boundaries. The online space becomes a forum where people all around the globe can publish their thoughts and opinions regarding any subject of interest for them, and others who share the same interest can contribute with their own ideas. This common interest is the foundation on which online communities are built (Preece, et al, 2003; Stanoevska-Slabeva & Smith, 2001). But apart from a place where people can just simply share information, an online community can become the ideal place where people can debate issues in society and solutions that can solve them. Thus, in online communities, people can engage in activism, or more specifically cyberactivism, where they use electronic communication technologies to generate a change in society (Alamazan & Garcia, 2014). With this new power and through their digital collective action they now have the tools to impact organizations, politicians, public figures or other institutions. This is what happened in the case we study, as members of the Reddit community mobilized and generated a crisis for hedge funds. Typically for studies conducted in the field of crisis communication, researchers take a traditional approach, focusing on the framework proposed by Benoit’s Image Repair Theory (1995) or Coomb’s Situational Crisis Communication Theory (2004). These theories are organization-centered, focusing on how a certain crisis impacts the life of the company and the tools the organization can use in order to reduce its reputational damage and mend its 1 relationship with the stakeholders. We believe that this approach was suitable when the public was passive, with people finding themselves just at the receiving end of the messages emitted by the organization in crisis. However, as publics are becoming active participants in the communication, gaining more power to express themselves during a crisis, we believe it is not enough to look only at what and how the organization communicates. This is a limitative approach, not suitable anymore to grasp the particularities of our complex world. Thus, we need new methods able to accurately explore this complexity, able to capture all the voices involved in the crisis communication, especially when the crisis situations themselves become more complex generating impacts beyond a single company and spilling over an entire industry. In this paper, we will follow a rather new approach that of the Rhetorical Arena Theory (Frandsen & Johansen 2010), suitable to observe the multivocality of a crisis. The GME crisis represents a powerful example of how online communities provide its members the tools to mobilize and generate huge impacts on organizations and society. We believe that there were certain conditions which helped the community members to mobilize and impact the normal functioning of hedge funds in this particular case and we are interested in studying them closer. By offering an understanding on this case, we believe these findings are valuable information which can raise the awareness for different organizations in the public sphere to pay attention to the voice of online communities as they now have the power to impact their lives. Based on these ideas, organizations can shape their communication and their crisis communication taking into account the impact they can have on more that their primary