At the start of the 21st Century, no-one could have imagined what a monster social media would become. Now, it seems, it can control everything.
The journey that social media has undertaken so far is nothing short of extraordinary. From a way of keeping up with friends (it was one of three at the start; remember MySpace and Friends Reunited) to one of the most efficient money-making machines ever. At that point, it teetered between social media and commercial media, as its users realised that their data was making others very rich indeed.
After that, its influence became truly frightening.
Social media became the voice of a US President and then closed him down; it could influence elections (allegedly); it could control free speech, and now it seems it can control entire financial markets.
Although the GameStop story started on Reddit, it quickly spread and social media companies like Facebook moved to stop their platforms amplifying the chaos.
The GameStop story is intriguing and one that will have made a small number of people very rich, very quickly. It is compelling partly because it has a Robin Hood ring (and the RobinHood app’s downloads continue to soar). It ‘out hedged’ the Hedge Funds (which some would argue was fun to watch).
Hedge Fund managers had targeted GameStop and AMC Entertainment and placed bets that the value of the shares would do down. A Reddit forum spread the word that people should buy shares in these companies, forcing the shares up, not down.
Hedge Funds had to close their positions with massive losses, some on the Reddit forum made massive gains and then, as the positions were closed and the nimble took their profits, many more were left high and dry as the share prices plunged again.
The chaos was such that it had left the integrity of financial markets themselves in serious disarray. The US Treasury Secretary, Janet Yellen, has already called an emergency meeting of the market’s regulators to see what can be done to stabilise things. After all, it could easily happen again – and probably will.
Social media can now distort and influence every aspect of our lives. It has created digital tribes (a Hugh Roberts‘ expression) of people prepared to follow leaders into whatever battle they want to start. They will throw away their money, their dignity and even their liberty to follow those they believe to be right (and who shout the loudest).
We must beware the power of social media. If it has gained this much influence in under 20 years, how much more could it gain in the next 20.