A wild few days for the stock market resulted in some interesting moderation moves by a handful of communications/social media platforms.
A group of unassociated retail investors (i.e. day traders playing the stock market with the assistance of services like Robin Hood) gathering at the Wall Street Bets subreddit started a mini-revolution by refusing to believe Gamestop stock was worth as little as some hedge funds believed it was.
The initial surge in Gamestop’s stock price was soon followed by a runaway escalation, some of it a direct response to a hedge fund’s large (and exposed) short position. Melvin Capital — the hedge fund targeted by Wall Street Bets denizens — had announced its belief Gamestop stock wasn’t worth the price it was at and had put its money where its mouth was by taking a large short position that would only pay off if the stock price continued to drop.
As the stock soared from less than $5/share to over $150/share, people began flooding to r/wallstreetbets. This forced the first moderation move. Moderators briefly took the subreddit private in an attempt to stem the flow of newcomers and get a handle on the issues these sort of influxes bring with them.
Wall Street Bets moved some of the conversation over to Discord, which prompted another set of moderation moves. Discord banned the server, claiming users routinely violated guidelines on hate speech, incitement of violence, and spreading misinformation. This was initially viewed as another attempt to rein in vengeful retail investors who were inflicting pain on hedge funds: the Big Guys making sure the Little Guys weren’t allowed on the playing field. (Melvin Capital received a $2.75 billion cash infusion after its Gamestop short was blown up by Gamestop’s unprecedented rise in price.)
But it wasn’t as conspiratorial as it first appeared. The users who frequented a subreddit that described itself as “4chan with a Bloomberg terminal” were very abrasive and the addition of mics to the mix at the Discord server made things worse by doubling the amount of noise — noise that often included hate speech and plenty of insensitive language.
The ban was dropped and the server was re-enabled by Discord, which announced it was stepping in to more directly moderate content and users. With over 300,000 users, the server had apparently grown too large, too quickly, making it all but impossible for Wall Street Bets moderators to handle on their own. This partially reversed the earlier narrative, turning Discord into the Big Guy helping out the Little Guy, rather than allowing them to be silenced permanently due to the actions of their worst users.
Decisions to be made by Discord:
- Do temporary bans harm goodwill and chase users from the platform? Is this the expected result when this happens?
- Is participating directly in moderation of heavily-trafficked servers scalable?
- How much moderation should be left in the hands of server moderators? Should they be allowed more flexibility when moderating questionable content that may violate Discord rules but is otherwise still legal?
Questions and policy implications to consider:
- Are temporary bans of servers more effective than other, more scaled escalation efforts? Are changes more immediate?
- Is the fallout from bans offset by the exit of problem users? Or do server bans tend to entrench the worst users to the detriment of new users and moderators who are left to clean up the mess?
- As more users move to Discord, is the platform capable of stepping in earlier to head off developing problems before they reach the point a ban is warranted?
- Does offloading moderation to users of the service increase the possibility of rules violations? If so, should Discord take more direct control earlier when problematic content is reported?
The Wall Street Bets Discord server is still up and running. Its core clientele likely hasn’t changed much, which means moderation is still a full-time job. An influx of new users following press coverage of this particular group of retail traders may dilute the user base, but it’s unlikely to turn WSB into a genteel community of stock market amateurs. Discord’s assistance will likely be needed for the foreseeable future.
Written by The Copia Institute, January 2021