Some wanted to be on the front lines of a revolution. Some wanted to be rich. And by the end of a wild two-week ride where fortunes were made and lost, some just hoped they’d be able to pay their rent.
Winners and losers are made every day on Wall Street. And for a while, the unlikely trading boom around the stock of the beleaguered video game retailer GameStop put the little guy on top. Breathtaking fortunes appeared overnight.
But they disappeared almost as quickly.
At its highest point, GameStop’s share price was $483. On Friday, the stock was worth $63.77. The trading frenzy — powered by online hype over a rebellion against traditional Wall Street powers — had created, and then destroyed, roughly $30 billion in on-paper wealth.
Many small-time investors who got caught up in the mania as it peaked lost big. Timing a trade perfectly is nearly impossible even for the best stock pickers, so even those who made money missed out on far greater riches if they didn’t sell at the rally’s peak.
Whether they set out to make a mint or make a point, these traders rode the GameStop wave up — and down.
Money on the Table
What do you do when you’re 19 and suddenly holding a quarter-million dollars in stock? Shawn Daumer went to Hooters.
Armed with money partly from high school graduation gifts and winnings from trades on stocks like Tesla, Mr. Daumer had spent about $47,000 on shares of GameStop the week before it went through the roof.
It was Jan. 26 — just two days into GameStop’s big week — when he and his brother hit up Hooters, scarfed down 30 wings and got 10 more to go. Two days later, GameStop hit its intraday peak of $483 and Mr. Daumer, a real estate broker in Valparaiso, Ind., was holding 1,233 shares. He was up more than a half-million dollars on his initial investment.
Mr. Daumer traced his interest in GameStop to the same place many others did: Reddit’s WallStreetBets forum, where armchair traders gather for raunchy jokes, tales of success and even to brag about enormous losses.
“Really the biggest part is once you see everybody buying shares day after day, and seeing it live on your own screen, and watching it go up,” Mr. Daumer said in the midst of GameStop’s surge. “It’s follow the trend, you know? If that’s the trend, follow it and it makes you money.”
GameStop vs. Wall Street
Let Us Help You Understand
- Shares in GameStop, the video retailer, have crashed from their January highs, which were driven by memes on social media.
- Amateur traders egging on one another on Reddit bet heavily on shares of the company in January, sending the price up more than 1,700 percent at one point.
- The wave was in part aimed at hurting large hedge funds that had been short selling — betting against — GameStop stock. Some of those funds experienced huge losses as a result.
- But many of the individual investors who pumped up the stock could lose huge amounts of money, too. Some believe the price will go back up and are refusing to sell, even as the share price has collapsed.
- Now, regulators are looking into how the rally started and whether new rules should be created because of it.
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