A few years ago, I compared the rise of retail investors that manifested itself in the first wave of the meme stock craze to the Star Trek episode, “The Trouble with Tribbles.”  If you know the episode, you’ll remember that tribbles were adorable and soothing creatures, but they quickly got out of control and threatened to overwhelm the Enterprise. There’s a tendency among corporate execs to consider retail investors to be adorable and soothing as well, but they can also get out of control – especially if they decide to show their teeth.

As this WSJ article explains, that’s something that the former CEO of Opendoor Technologies recently discovered to her chagrin:

The army of retail traders who rallied around AMC Entertainment and GameStop a few years ago recently set their sights on Opendoor Technologies. They got the stock up, which is par for the course. Then they turned on Chief Executive Carrie Wheeler, which isn’t.

Wheeler’s ouster showed the renewed power of these investor mobs, who are starting to make demands on their favorite stocks much as traditional activist shareholders do—only with more online memes and name calling.

In Opendoor’s case, the manager of a tiny Canadian hedge fund emerged in July as the unlikely ringleader. Eric Jackson and his followers have since made additional demands for Opendoor’s board, and the directors appear to be listening.

The article discusses how Opendoor came to be a meme stock and how the company has tried to respond to what the WSJ calls “investor mobs” (personally, I think “tribbles” is a less judgmental term). It points out that the meme stock crowd may have moved on from Gamestop & AMC, but their influence on the market persists. In that regard, the article also says that retail accounts for nearly 20% of the stock market’s trading volume, up from 10% in 2010, and that retail investors are moving into the options market as well.  God help us (and them).

– John Jenkins