GameStop’s share price below $50 this week, its lowest since January 21, around the time an army of retail traders mobilized on Reddit forum r/WallStreetBets to pour cash into the video game store. GME had dipped below $3 in April. As you’ve likely heard, its stock briefly rose as high as $483, scores of small-time investors jumped on the bandwagon and hedge funds who’d bet against GameStop were forced to buy shares to make up for losses. The price rose until the shorting funds had divested and brokerage apps like Robinhood froze trading, killing momentum and ending the short squeeze cycle. 

At least, that’s the generic version of the GameStop saga. But there’s no one story of the frenzy of the last few weeks. Some people invested a few bucks as a joke, while others poured in life savings and maxed out credit cards. Some invested after seeing a single Tweet, while others had meticulously followed, analyzed and posted about GameStop for a year. Some thought the whole thing was a joke, while others saw themselves as heroes of an Oscar-winning Wall Street revenge movie. Another contingent genuinely believed GameStop was poised for a comeback, with the help of Chewy co-founder Ryan Cohen who joined the board in January Some are clear they were in it for money, while others insist they couldn’t care less about their profits long as hedge funds lost (there’s no way to know if people who racked up and lost millions were holding out more cash or more banker blood). And course, some made millions (notably, Cohen, billionaire Donald Foss, Blackrock and other hedge funds who got clued into what was happening), while others (who are celebrated as martyrs on the Reddit’s loss porn threads) are facing financial ruin. 

Business of Business chatted with several GameStop investors who fall all across these spectrums.

Name: Jordan
Age: 27
Occupation: technology consulting
Location: Austin, Texas
Profit or loss: profit
How much: “not a life-changing but substantial” amount

When did you first join r/wallstreetbets? Is it more of a social community or investing resource?

Five years ago. I’m more involved in Reddit's more... traditional investing forums. A few months ago, WallStreetBets had no credibility. They were more of a joke than anything. Back in 2016, 2017, 2018, it was so known for losing money that people would talk about specifically betting against whatever WallStreetBets was going for. Like, a lot of healthcare stocks getting promoted there just cratered. It wasn't until recently that the subreddit had a streak of wins, like Tesla. It’s started to grow since then.

Is that when you started paying more attention?

A couple months ago, there was a lot of buzz around Palantir. I didn't buy any but it was a recent example where the forum made a call and a lot of people did well. Right after that was when the GameStop buzz started in November. They had a play that made sense: a retailer priced for bankruptcy, entering the peak of a cycle, and you have Ryan Cohen [co-founder and ex-CEO of Chewy who joined GameStop’s board in January] getting involved. That's when I went from checking WallStreetBets a couple times a week to multiple times a day.

When did you see the GameStop chatter turn into a campaign.

Two to three weeks ago when the stock shot up from $20 to $40. It was around $40 that the narrative changed. Before, it was “this is a retailer priced for pennies on the dollar with a decent balance sheet, new innovative board members.” Only around $40 did the narrative of “sticking it to the hedge funds start.” But I think, at the end of the day, everyone is really just there to make money on their trades. I don't think that sticking it to hedge funds is anyone there's serious, long-term concern. People would rather make money. 

"I don't think that sticking it to hedge funds is anyone there's serious, long-term concern. People would rather make money. "

When did you first invest in GameStop? 

I first invested in mid-December. When I bought there seemed to be real catalysts that could rocket the price higher in the short term, like the changing leadership with Ryan Cohen from Chewy.

What have the last couple of weeks been like for you?

Everything kicked off on Friday [January 22] when it went from $20-40, then $55-60. A lot of people thought this was due to a gamma squeeze. Whatever it was, it cemented that this could actually happen. Monday and Tuesday were absolutely insane. Opening up and seeing the stock over 100%. 

When did you sell? Will you make a profit or a loss overall?

I sold the majority of my shares on Tuesday afternoon. I'd noticed there was a lot of volatility after hours which meant it’d open lower the next day. My plan was to sell into that after hours volatility and then buy back in the next morning. But the stock price rose so high that I got caught on the outside. In hindsight, that ended up being fortunate. I made not a life-changing amount of money but a very substantial amount. Among all my previous investments, this is the highest profit by far.

In your eyes, what went wrong?

The one thing that prevented this from taking off was the fact that Robinhood, the broker the majority of traders were using, did not have enough capital to carry it through, which killed the momentum. My initial reaction, as it was theorized, was that Robinhood was in bed with hedge funds and doing this to benefit them. But it makes sense that it was a liquidity issue.

What do you think truly motivated r/WallStreetBets? Profit or sending a political message.

The political statement arose very quickly and it was very surprising to see. This is anecdotal, but WallStreet Bets is probably a right-leaning community. The class warfare narrative, I'd say that's largely coming from newer members of Reddit. I don’t think the more long-standing base buys into that. There’s usually a boogieman on Reddit: “Who’s the bad guy on the other side of your trade?” With Tesla it was the shorts, with GameStop it was the hedge funds. At the end of the day it doesn't really matter.

What do you think people (media, commentators) are getting wrong/?

The media came in late and the political narrative took over very suddenly, so the catalysts, like Ryan Cohen joining the board, are missing from coverage. A lot of coverage also says "GameStop was targeted because memelords thought it would be funny and there's a lot of gamers on the forums." That really had nothing to do with my eyes. And I think most of the Occupy Wall Street stuff was newer members. 

To you, were Melvin Capital’s losses a victory?

Frankly, I don't care about [Melvin Capital]. They’re just another boogeyman, the bad guy so to speak. People would rather make money than stick it to a hedge fund. I'm confident about that. 

What do you think the long-lasting impacts of the squeeze will be? 

One thing I’m confident about is there’s going to be a lot more people on these forums, trying to front-run the next wave. I’ve already seen people writing scripts that pull down all the comments on forums, analyze ticker symbols, even do sentiment analysis. I can already see there's going to be hundreds of articles headlined "The Next GameStop," just like articles about "The Next Amazon." I think they're all going to be junk and not worth reading. 

Name: Michael
Age: 29
Occupation: sotware development
Location: Brooklyn, New York
Profit or loss: loss
How much: “the amount I would tuck away into savings for a month”

When did you join r/WallStreetBets? 

I heard some rumblings about GameStop online, from YouTubers, but it didn't really interest me. I didn’t really plug into it until it was in full swing, around the $200 range [Tuesday, January 6]. That's when I went on to WallStreetBets and read the original post from DeepFuckingValue and the other early people and tried to understand it. That's also when I got tuned into the culture, which is... insane. If I had jumped in before the GameStop thing, I would've said "These people are all going to lose a lot of money and this is an idiotic group." I mean [r/WallStreetBets] is funny sometimes, but like, funny to the worst parts of myself. 

"I mean [r/WallStreetBets] is funny sometimes, but like, funny to the worst parts of myself. "

You were skeptical. How did you go from "these people are idiots" to buying?

I did the reading to try to understand that was happening. I knew what short-selling was but I didn't know how a short squeeze worked. Once I saw how it could force shorting firms to push the price higher and higher, I thought "Oh wow, that's a really cool trick." In retrospect, people's estimations were off but I was like, "Wait, if this is right, if this is not full of shit, then this could really work."

When did you first invest in GameStop and why?

My average buying price was somewhere in the low $200s. I watched it ride up. I could've gotten out for a profit but I didn't. I  hung in because everyone was saying, "The squeeze hasn't happened yet, the squeeze happened yet." It was crazy. There were people posting their positions who had become millionaires, saying they could finally pay off student loans but were refusing to sell because "the hedge funds have not been squeezed yet, don’t sell." So I didn't. I bought into the promise that the price would be in the thousands it wasn’t. And then I got out at a loss. 

What do you think truly motivated r/WallStreetBets? Profit or sending a political message.

Like for most people, it was a combination of greed and punishing Melvin Capital. That was the promise: these guys are gonna hurt and you're gonna come out a millionaire. I kind of just wanted to be a part of it. It was super intoxicating in the moment like, “little old me can actually hurt a 12 billion dollar hedge fund? How is this possible? It briefly had this feeling of, "We're making them uncomfortable, these untouchable people, we're doing something that's making them hurt, that's making them lose sleep." 

What went wrong in your eyes? 

I think it was a huge success but people aren't willing to accept that. The squeeze happened. The price went up. Melvin Capital lost $5 billion. But when all the hedge funds liquidated their short positions, Reddit people didn't believe it. They were caught up in this idea of punishing Wall Street that they were hurting themselves and staying in as the price continued to fall. There were all of these reports, CNBC was saying, Melvin Capital has liquidated their position, the short interest has fallen to 40%, there aren't any people shorting this anymore. WallStreetBets were like, "That's a lie. Wall Street controls the media. They're trying to get you to sell so that they can escape. Keep holding." People were making up financial terms that don't exist, saying that these are "naked shorts and “it’s impossible for them to close their position because there aren't enough shares in there." People could’ve gotten out with millions. But they had an image in their minds of, "I want to see a hedge fund manager crying, groveling on TV. It's not done until I see Melvin Capital go out of business." It's like a revenge movie, where it was never enough. They wanted to see these people out on the street.

What eventually made you sell? 

I read this post from an anonymous hedge fund poster on Reddit. He was like "You guys absolutely out of your minds if you think you can win against the hedge funds. They can do this all day. You maxed out your credit cards for this? But they can just move money around for years and years and years if they need to.” I’d bought this dream that some kids had come up with a hack the Wall Street guys couldn't get out of, but that wasn’t true. 

Do you have any regrets about investing?

No. I don't regret it. If I was much more knowledgeable than maybe I wouldn't have made the same decision. But I wanted to be part of it. It felt like something that happens very, very rarely, if not once in a life-time. I ended up losing about a month of savings. But it didn't ruin my life. A lot of people on there maxed out their credit cards, traded on margin. Somebody posted a picture of him maxing out his dental school loan and liquidating his dental school loans to buy GameStop.

What do you think will be the lasting impact of the GameStop short squeeze?

I'm not optimistic as far as regulation. But I think it shows what can happen when the people want to value something. I mean, AMC actually closed out all their debt because a bunch of people decided it was valuable. Like, even though the people of WallStreetBets are pretty much just gross, disgusting people and their motivations aren't necessarily good, it shows that if people want something, they can do a lot. Maybe they can't win in the end, but these guys knocked off half of the value of one of the biggest, most respected hedge funds in the world.

What do you think people (media, commentators) are getting wrong?

People aren't talking about what it says about how we can value things in society. Something is only valuable because we collectively decide it is. I hope that this could empower people to see that. Like with Tesla, it doesn't make as much as any other car company, but because people got together and decided we want this to be valuable, we want to be more valuable than Toyota and General Motors. We can do that as regular people. We can decide what is valuable in our society. We don't need to actually look at profit and balance sheets. What guys are doing with Tesla is the same thing that these guys did with GameStop. I want to say to Wall Street, “You guys decided that Tesla is gonna to be valuable. You just turned Elon Musk into the richest person in the world.” Maybe people can look at that and see, "Things don't need to make money for us to invest into them and care about them. We're already doing that today.” Then maybe we can think more imaginatively about where we invest as a society.

Name: Alan
Age: 23
Location: Ireland
Occupation: finance
Profit or loss: profit
How much: “a ton of money”

When did you join r/wallstreetbets? Is it more of a social community or investing resource?

I joined in 2016. I exclusively used it for reading purposes to learn about up and coming industries. Before the GME saga, I would have said that it was an investing resource, but this whole incident has really rallied the troops and given people a sense of friendship with members, especially on the Discord.

Were you involved in the organization or planning leading up to the GameStop squeeze?

I was very active in the Discord over the past couple weeks. But I don't know if planning is the right word though. I don't think that we, as a group, had a plan going in. Probably if we’d had a plan, we would have been able to realize it. We were for sure the ones that popularized GME but I don't think we planned for the price to go to $450 so fast. WallStreetBets, altogether, at the start of the rally (from $10-$30) probably had a 2% stake in GME, nowhere near the amount required to artificially move the price. We weren't the only players on this.

When and why did you first invest in GameStop? 

I got in GME at $12.4 back in October because I believed in the company. 

Describe what the past few weeks have been like for you.

The past month has been absolutely wild and mentally exhausting.

Have you sold at any point? Overall will you make a profit or a loss?

I could have sold at $450 but chose to hold my shares out of principle. I believe in a free market, and while what we have right now is advertised as one, it doesn't take long to realise that the 0.1% control it. I bought at $10, sold 50% at $30, 50% of what I had left at $150, and the rest at $70 on Friday.

Do you have any regrets?

I don't think that regret is the right word. If I had the power to read into the future and I still made the same choices, I would be dumb, but I’m not regretful. The only thing I regret is not having superpowers I guess. There was no way of knowing it would go from $2.68 to $483.75 exactly. I still made a ton of money from it, which was the point. 

In your eyes, was the squeeze a success?

I feel like it's wasted potential more than a failure at this point. We still had a good run, even if it ended up failing for now. I do feel bad for those who joined in at $450 though.

What went wrong, in your eyes? 

Robinhood halting trading was the sole reason this whole thing failed. It killed the momentum. Because the only option people had was selling, that's what they did, which sent the price crashing.

In your eyes, what motivated r/WallStreetBets? Profit or sending a political message.

I can safely say that [anger at Wall Street] is the mindset of the majority of the forum, at least before it exploded to 8.5 million members. This is about sending a message to the ones in charge, not about profit or losses. I mean not too long ago, we had a billionaire being interviewed live on CNN, crying in front of a camera because he didn't want to be taxed more heavily. How do you think that the person living paycheck to paycheck is gonna feel like seeing that? As long as we stay passive towards that, the rich will get richer and the poor, poorer.

"Not too long ago, we had a billionaire being interviewed live on CNN, crying in front of a camera because he didn't want to be taxed more heavily. How do you think that the person living paycheck to paycheck is gonna feel like seeing that?"

What do you think people (media, commenters online) are getting wrong? 

r/WallStreetBets did not cause the squeeze. Retail investors are not the problem, and if the rules need to change, we should not be penalized. The hedge funds, which have been abusing the system for the past 40 years should. It was the rich who caused the 2008 housing market crash, not the poor. Yet, the rich were bailed out and it was the poor who lost their jobs, houses and much more.

What do you think the long-lasting impacts of the squeeze will be? 

We might get a small influx of people joining retail trading long term. I don't see it changing all that much. The SEC has been no help. They’ve likely already bought out already as it has started an investigation on the subreddit instead of the hedge funds. What GME did is expose the bad side of investing to the general public. We might get some lawsuits hopefully (Robinhood, Citadel as far as regulations regarding for naked shorting). However, the amount they would have to pay is going to be pocket change to them anyways.

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