If you’ve read the news in the past couple of weeks, or been keeping up with the memes on social media, you’ll have heard something about Reddit, angry hedge funds, a supposedly dying video game retail company, and all the hot takes that come with these types of events.

First, the facts.

On the site, the r/WallStreetBets forum went on a hunt for companies with heavy hedge fund bets against them. GameStop, the world’s largest video game retail store, battered by the move to online sales and failed investments into other areas, ended up being the home run.

With huge downward pressure from short-sellers and no economic case for significant positive investment, the “Outsider Trading” community ganged together using their Robinhood trading accounts and pushed the stock higher and higher, ultimately leading to a 1,700% gain from its January 1st price to its recent peak. With it, the hedge funds betting against it suffered enormous losses. Melvin Capital, the biggest loser in all this, had to borrow over $3 billion to close out its short position.

An internet movement was born.

Since GameStop peaked, we’ve seen the movement funnel off into other investments, partly due to Robinhood restricting trading of GameStop stock. It remains to be seen whether their claims of settlement mechanics being the reason for these restrictions are the whole truth, but it underscores a fundamental policy point in all of this.

What does an internet subculture boosting an unpopular stock, making some hedge funds take some heavy losses, and restrictions on an app-based trading platform have to do with popular capitalism?

One of the core elements of our philosophy here at Popular Capitalism is a belief in fair and equal access to open and efficient capital markets. The stock market has always to some degree favoured insiders, brokers, and well-connected traders, but in recent years technology has democratized the market more than ever before. Apps like Robinhood allow for commission-free trading that is easy to access and quick to execute. Anyone who wants in the game can instantly deposit cash in their account and purchase securities in the public markets.

The traditional gatekeepers – stockbrokers, trading houses and investment bankers – are having their walls torn down. Many of them aren’t happy about it. The complaint hedge funds are levelling against the r/WallStreetBets community is that they’re manipulating the market to their own advantage. This is undoubtedly true. Leveraging hundreds of millions of dollars in purchasing power to direct it against short sell bets is (almost certainly legal) market manipulation. Yet how is it any different from the common short-selling tactics of hedge funds who use their billions in cash reserves to pummel vulnerable stock prices lower in order to make tidy profits? The only difference this time is that it backfired.

The democratization of the stock market doesn’t mean much if the taps can be turned off when the gatekeepers complain.

The more troubling aspect of all this isn’t the cries of hedge fund managers but the trading restrictions applied to Robinhood account holders. The democratization of the stock market doesn’t mean much if the taps can be turned off when the gatekeepers complain. At this stage, it’s too early to predict the legal impact of that decision, but it looks like the U.S. House Financial Services Committee and the Securities and Exchange Commission are both going to investigate what happened.

It will take some time to see how Robinhood itself is impacted, or determine the future direction of the Reddit-led investor community. There are a few takeaways we can take be sure of now, however.

First, despite the recent trading restrictions, Robinhood and other similar trading apps have lowered the barrier to entry for the average person to engage on a fair basis in public markets. This is undoubtedly a good thing, and we should advocate for more of this on an increasingly transparent basis.

Next, shutting down trading of particular stocks for what appears to be political reasons is extremely problematic. We should demand answers from those who made the decision, and work towards a system where this can’t happen.

Additionally, predatory short sellers are a problem in the market, but got a taste of their own medicine in this case. The market won out over big hedge funds that acted as if they were invincible. It’s possible this will be a watershed moment for public markets if it changes long-term behaviour.

Fourth, hopefully the public interest in this story will lead to more financial literacy among average people, in particular for younger generations who (not unfairly) view the stock market as being somewhat rigged, and not in their favour.

Finally, this isn’t the end of the GameStop story. At some point, economic reality will set in and someone will be left holding the bag. There’s a reason this stock was heavily shorted, and when the Reddit money moves on to something else (now that they’ve beaten back the hedge funds), GME is going to fall back to earth and cause a lot of pain to average investors.

At Popular Capitalism, we aren’t going to re-invest stock market regulation overnight, but we will continue to advocate for a popular capitalist public stock market in which anyone with savings can access a fair, efficient, transparent and open trading platform. The GameStop Revolution may end up being a flash in the pan, but the direction it’s pointing in is the right one.