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Hi Troopers,
Following the one year anniversary of the infamous GameStop short squeeze, news outlets have been quick to center their coverage around plummeting meme stock prices, the uncertain futures of GameStop traders who won big, and overblown market bubble fears.
While each of these takes contain some truth, there is one point missing: that the GameStop revolution, uprising, not-revolution (whatever you want to call it) has ushered in a whole new era for retail investors.
Today, we’re taking a moment to celebrate and reflect on how $GME was a key development in the ever-growing power of activist investors.
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A year after diamond hodlers made history, analysts are still stressing out about the prices of $GME and $AMC, GameStop’s digital strategy, and a shaky stock market. But here’s where they’re missing the point:
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😮 Everyday investors voted... No, like, actually, voted for once
- $GME voter turnout was unprecedented – EToro, a major retail broker, found that 63% of their users voted on their $GME shares. This is more than twice the average retail voter turnout in 2020.
- Plus, we caught a glimpse of our collective power – 98% of $GME shareholders who cast a ballot voted to put Ryan Cohen, an e-commerce messiah expected to bring GameStop into the digital era, onto the company’s board of directors. This is the magic of when *hits cue* we’re all in this together. 🌈
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Papa Cohen (who btw is the co-founder of Chewy🐶) loves leaning into the $GME shareholder community – we would too with a 98% approval rating!
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🗣 Retail investors are expanding their influence in the realm of shareholder activism
- You can now tell Engine No. 1 what you care about – In just the past year alone, Engine No. 1, the activist hedge fund taking down Big Oil, has released two ETFs, $VOTE and $NETZ, for us sustainably-minded folks. The fund has been asking investors what shareholder campaigns they want to focus on and even plans to report in real-time how investors' votes are being cast. Considering that most investment funds rarely do either of those things, we think this is a pretty big deal. Cheers to transparency!
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Records of how Engine No. 1 used investors’ shares to vote in Nike’s 2021 Annual General Meeting. What does management have to hide? 👀
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A new voting bloc is in town – Employee groups and unions are concentrating their shareholder influence and becoming a powerful voting bloc. Take Microsoft for example: In November 2021, shareholders passed a resolution to release a report on the company’s sexual harassment policies. Out of five resolutions, this was the only one to pass and garnered 40% more support than the others. There’s a reason for this rare success. For the last few years, brave Microsoft workers have been speaking out about their experiences. Mounting internal pressure literally catalyzed this resolution.
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No signs of slowing down – At the end of Q3 2021, activist investments in consumer stocks hit a value of $144B — up from a measly $17B just one year earlier. Since consumer stocks are easy to understand and generally newsworthy, they’re great targets for activist campaigns. With activist investors owning more shares, expect to see more shake-ups in corporate America.
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🤝 Everyday investors are collab-ing more than ever
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Oh God, not another crypto DAO (Decentralized Autonomous Organization) – Yes, several, in fact. Crypto and web3 are becoming poppin’ spaces (likely due to lack of regulation) for group investing experiments. ClimateDAO aims to be the first decentralized activist fund focused on fighting climate change. DiatomDAO is a community-driven DAO that invests in ocean conservation. Meanwhile, Syndicate recently released tools to create web3 investment clubs.
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📚
If you’re wondering “what’s a Decentralized Autonomous Organization?” here’s a definition we like from Fortune:
“A DAO, or decentralized autonomous organization, is a group of people who have entered into a contract with one another to reach a coordinated goal. It can be anything from collecting rare NFTs, to predicting stock market moves.”
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- Are you part of a subreddit? – 60% of retail investors younger than 40 are part of an investor community like Reddit or Discord. Data also shows that new investors are more likely to turn to online chats for investment advice than traditional institutions.
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💡
"It doesn't matter what your experience level is. You can be a complete beginner or you can be someone who's been trading for over 15 years. We try to create a community that's welcoming to everyone.”
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Have fun, just remember to do your own research!
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- Plus, the rise of the Fin-fluencer - 50% of Gen Z’ers are turning to TikTok to seek out financial advice, according to a 2021 study. Mrs. Dow Jones is one example of a financial influencer (or as some are calling it “finfluencer”) who uses social media to share basic tips on saving money and investing with a wide audience. But watch out, not all social media advice is credible.
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The meme about the halftime show is sending us…
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- Best of all, the investor community is diversifying - Investment accounts are being opened by a much broader representation of the U.S, population both racially and socioeconomically. This is mostly because it’s gotten way easier to invest small amounts.
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New Investors = Individuals who opened their first investment account(s) during 2020
Holdover Account Owners = Individuals who already owned an investment account, and did not open a new account during 2020
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Here’s what our team’s been snacking on this month
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In 1947, civil rights leaders purchased Greyhound shares to target the bus company’s segregationist policies, an inspiring coming together of civil rights and shareholder activism – Business Scholarship Podcast (~27 min, 🎧)
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Gary Gensler’s cracking down on financial corruption, awarding more whistleblower payouts in 2021 than in the previous nine years combined. In total during this time, the SEC has awarded more than $1.1B to whistleblowers – SEC Whistleblower Report (~N/A, 📈)
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Catfishing is on the rise, according to the FTC. It’s unclear if this is related to the recent documentary, The Tinder Swindler. +1 to the FTC for looking out. Maybe being single on Valentine’s Day wasn’t so bad – Input Mag (~5 min, ☕️)
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🖤
Lastly, you’re probably familiar with one of Martin Luther King Jr.’s most famous quotes: “Injustice anywhere is a threat to justice everywhere.”
What you may not realize though is that this quote references economic justice and economic rights. As University of Pennsylvania Law Professor Lisa Fairfax said in her 2019 speech Social Activism Through Shareholder Activism, King “was emphasizing the fact that economic systems embody values, and that our economic decisions can and need to be just.”
“King was debunking the myth that we could separate our business decisions from the impact of those decisions on the broader economy and society,” Fairfax continues.
Read the rest of Fairfax’s talk here.
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As always, if you have any suggestions, thoughts, music recs, or feedback on how we can make our monthly newsletter better, please reach out to us at community@troop.com
See you in March!
🦍The Troop Team 🦍
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