Credit Suisse Was a Reverse Meme Stock

One truly new fact that I have learned about financial markets in the last two years is that random silly enthusiasm from retail investors on social media can save a big company from bankruptcy. You have a somewhat nostalgic consumer-oriented company, it falls on hard times, it has too much debt, things look grim, short sellers are circling, and then some people on Reddit are like “hey let’s have some fun and stick it to the short sellers,” it becomes a meme, the stock rallies, the company raises money at the new high stock price, it pays off its debts, it expands into non-fungible tokens, the retail investors save the day. It is still a little early to write an ending to this story. “Saved by retail investors, the company becomes a faithful and sensible steward of their capital and pivots to a leading role in the new economy,” maybe. “Eventually the company incinerates the Reddit investors’ money the way it incinerated previous investors’ money, but everyone has fun along the way,” also possible.

What about the reverse? Can random silly pessimism from retail investors on social media cause a big company to go bankrupt? No, I think is the answer so far, but give it time. Here’s a fun New York Times story about how Credit Suisse Group AG became a reverse meme stock: