The Antisocial Network: The True Story of a Ragtag of Amateur Investors, Gamers, and Internet Trolls Who Brought Wall Street to Its Knees

Plenty of other readers are disappointed in this book. Many of them share the same problems: flowery language, tangents, fluff, a frustrating lack of detail. But most readers agree that Mexrich does offer a better understanding of the GameStop short squeeze than what is available through casual news coverage.

In order to understand the roller coaster ride of the event, readers must have a basic understanding of a squeeze. A squeeze occurs when one financial institution borrows stock from another institution with the intention of selling it. The borrower must return the stock to the lender in a short amount of time, like 3, 6, or 12 months. The borrower assumes that the value of the borrowed stock will decrease, allowing them to buy back and return the original borrowed stock at a cheaper price. They profit the difference between the time the stock was borrowed and then returned. A short squeeze occurs when someone realizes a squeeze is happening and drives up the value of the stock, making it a punishment to buy back the stock at a much higher price.

Mezrich does not introduce this concept early on, in fact the first part of the book is devoted to introducing readers to a wife range of characters in short, dull, mostly pointless chapters. It was easy to lose each character’s story arch because most of them seemed to be irrelevant. And most of them were irrelevant. Some of them could have been entirely fictional. He briefly introduces the reader to something called “clearing” at about 50 pages in. “The plumbing behind the app” does little to explain what it is. About 50 pages later he brings it up again….and fumbles again. By the time it emerges in the later chapters as the lynchpin of a scandal, the concept remains ambiguous.

And so, reader, you are left with an incomplete accounting of what happened. Is clearing that important? Is it a convenient explanation or red herring? It is hard to say. Mezrich appears to hedge his bets against casting any blame. Clearing – whatever it is – is the official cause of the scandal. Yes, it is real; but Mezrich clearly sympathizes with the amateur investors and points out coincidences, too many cooincidences.

What was the scandal? In sum, a single Reddit user on a message forum made an impassioned declaration about GameStop. He may not even been aware of the short position(s) against it. Well, thousands of average Americans / retail traders set up accounts on a new financial services company called RobinHood, and bought GameStop stock. This shot up the price. More and more people spread the word creating a pyramid scheme in the stock. The stock became grossly over-inflated after 6 months; and RobinHood made the decision to stop clients from buying GameStop and 10 other stocks facing volatility. As a result, the stock came crashing back down. Many of the retail investors watched helplessly as their fortunes plummeted. Robinhood effectively cancelled the short squeeze and allowed the hedge fund(s) to recover.

Naturally, it was all legal. The forums coincidentally shut down at the exact same time that Robinhood froze buying stock. And RobinHood made its decision after being forced to deposit almost $4 billion in an obscure government agency to cover stock volatility. Yes, Mezrich glosses over these aspects. Readers have to sift through a lot of fluff to get to the bones.

Apparently, RobinHood cannot buy and sell trades. They need at least one other middleman to buy and sell. This goes back to Mezrich’s frustratingly vague explanations about plumbing in the financial services sector. There may have been other middlemen involved. But RobinHood’s primary middleman was a big company called Citadel. Exactly what Citadel does it rather vague in this book. But at the height of the short squeeze Citadel bailed out one of the hedge funds – and within 1-2 days of that bailout, RobinHood froze purchasing, allowing the troubled hedge fund to recover. It appears very conspiratorial. More so, considering that almost on the same day that the bailout and freeze occurred, a government watchdog required RobinHood to deposit almost $4 billion to cover trading when the previous sum as a more manageable (!) $700 million. And that number magically dropped to $1 billion after RobinHood decided to freeze buying.

But the $4 billion was based on a computer algorithm….so…..???? Mezrich barely covers the National Securities Clearing Company (NSCC). Again, clearing, what is it? He barely tells readers that they came into law in 2005 – yeah, riding high on the Clinton .com boom, the Bush II admin decided to put in place a new government regulatory body. The purpose of the agency is to ensure market stability in case of volatile securities trading. It is all done by computers. Yeah, sure, there has to be a human element if the numbers go down if certain stocks are taken out of the algorithm….but it is all computers….no conspiracy.

I admit that I skimmed large parts of the book. There is so much fluff. And it is hard to tell what is accurate and what is not. One person in the book eats Martian eggplants, another sits on a throne made from the bones of his enemies. Huh? The writing style drove me a bit batty. I was also disappointed in the lack of detail. The chronological order was solid. But readers are left with the impression that a conspiracy was whitewashed.

He does parrot the official line that a single impassioned plea for a brick and mortar dinosaur started a massive short squeeze that threatened any major financial services firm doing anything sneaky and suspect like shorting other companies. He does offer a simple explanation (twice) for rationalizing shorts – reevaluating companies and demonstrating market inefficiencies. These explanations ring hollow probably because Mezrich sympathizes with the underdog in this story.

Overall, the book is informative. Readers will walk away with a better understanding of the event. They will not fully understand everything that happened; but they will have a better understanding. That is necessary in case they join the next amateur investment bandwagon. Above the GameStop scandal, Mezrich shows how cynical and angry Americans feel about predatory practices in the financial services sector. He is eagerly looking forward to the next phase of the Occupy Wall Street Movement. When he writes about it, I hope he does so with less flair and more substance.