Alternative Expertise in Financial Markets : An Analysis of Due Diligence Posts on WallStreetBets

Traditional forms of expertise are increasingly challenged in different domains, not least because of the possibilities offered by the spread of the Internet. We aim to understand how a claim to alternative expertise in the investment domain emerged, developed, and propagated, taking advantage of the possibilities offered by digitalization – to the point of being able to thwart the ambitions of some notorious hedge funds. Specifically, we examine the claim to alternative expertise about investment opportunities as articulated in the WallStreetBets (WSB) community, which disrupted the stock prices of several “meme” stocks (e.g., GameStop) in early 2021 by disseminating influential investment narratives. We study the 150 most popular due diligence (DD) posts representing more than 530 pages of analysis from WSB; we also interviewed six authors of these posts. First, we show that the claim to alternative investment expertise took off in the wake of growing resentment among retail investors about the extent of unfairness in financial markets. Second, we highlight that, to appeal to their audience, WSB authors developed and promoted a claim to investment expertise which at once includes elements from traditional expertise while being clearly different. Therefore, the rift with traditional expertise is not total as the latter is used and adapted to increase the impact of the investment narrative promoted by the authors in the retail investor community. Theoretically, our paper improves our understanding of alternative forms of financial expertise sustained by market participants who unexpectedly became influential in digitalized financial markets, and thus became a kind of new information intermediaries. In addition, the paper illustrates how less powerful actors can unite through the Internet while creating a form of populist economics