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.”
But GameStop’s stock abruptly turned down when the trading app Robinhood and other brokerage firms announced a slew of restrictions on the trading of a handful of stocks that had been spiking. Mr. Daumer had about $200,000 in potential profits evaporate almost immediately.
“I’m still up 500 percent,” he said at the time. “I’m OK.” Besides, Mr. Daumer and his fellow Redditors believed GameStop would soar once more: “We’re going to $1,000,” he said.
They never came close.
Last week, as the stock plunged 72 percent in two days, he’d had enough. Mr. Daumer put in an order to sell on Tuesday afternoon, and the order was filled Wednesday morning at a price of $91.22.
He walked away with more than $65,000 in profit, more than doubling his investment.
Not everyone was so lucky.
A Rude Awakening
It seemed like a dream to Nora Samir.
She woke up in the middle of the night of Jan. 27 at her home in Sydney. On the other side of the world, GameStop was soaring.
The $735 she’d put in the day before had doubled. She raced downstairs to tell her mother, who was sleeping.
“Nora, don’t be greedy,” her mother warned. “You need to take it out.”
But Ms. Samir, 24, a child-health researcher at the University of New South Wales and a stock market neophyte,
didn’t sell — she bought.
After investing about $800 more, she owned just over nine shares of GameStop. She later plowed $1,800 into BlackBerry, the cellphone maker that once dominated mobile email and had been swept up in the frenzy.
“I was on a high,” she admitted. “When the stock is going up, you don’t think of how low it can go.”
The high didn’t last long — and the fall was made worse when her trading app crashed, leaving her with little choice but to hold on while GameStop shares plunged.
She managed to sell one share on the way down, for $134. The shares she still owned on Friday were worth $528. She’s lost more than half what she put into GameStop.
The lesson, Ms. Samir said: “Don’t be greedy.”
You Only Live Once
Jacob Chalfant, a high school senior from Westfield, N.J., enjoyed how his “diamond hands” were putting the squeeze on the hedge funds.
A poster on WallStreetBets since he was 15, Mr. Chalfant, now 18, relished the GameStop rally for the pressure it put on hedge funds like Melvin Capital, which had bet that GameStop’s shares would fall.
In the parlance of Reddit, Mr. Chalfant’s diamond-hard hands won’t fold, unlike the “paper hands” of sellers. He’s still holding the shares he bought for $1,035 — about a month’s wages from his job at a pizza shop and his freelance photography business — when GameStop was trading at $290. On Friday, his investment was worth $220.
“I’ve come to terms with the fact that I’ve already lost the money,” he said. “Realistically, the stock is not going to go where it was before.”
But the losses are an investment, too, Mr. Chalfant said. They’ve earned him “internet points” on WallStreetBets. “If you’re saying, ‘I’m still holding,’ you have more clout than if you didn’t,” he said.
(Many on the WallStreetBets forum insist that GameStop’s shares may surge again. On the other hand, another Reddit forum opened last week where users share tales of losses from trading the stock whose ticker symbol is GME: GMEbagholdersclub.)
Mr. Chalfant said he and other teenage traders enjoy the gamification of the investing, and many of his friends had gotten in on GameStop just because they thought it was funny, not to make money.
“We’re living in a system where there’s no such thing as justice anymore and the entire world is falling apart,” Mr. Chalfant said. “Nothing really matters, so we might as well try to have fun while we’re here.”
For Terrell Jones, it wasn’t a GameStop investment that taught him a lesson.
Instead, Mr. Jones, a college student from Kenosha, Wis., bought $300 of AMC, the movie theater chain whose stock was also swept up in the frenzy.
“I just caught up in the social media hype and just dove right into it,” he said. “I fell for it.”
When AMC started to fall and he had lost $112, Mr. Jones, 24, panicked.
“I just had to get out of there as soon as possible,” he said. “It’s a lot of money, we’re in the middle of a pandemic and I have rent that needs to be paid.”
Losing His Head
Ordinarily, C. Arthur Davitt is a model of financial discipline.
He automatically sweeps $200 a month into an index fund, saves enough to get a company match on his 401(k) and has been aggressively paying down his $35,000 in graduate school debt.
But Mr. Davitt, 29, thought it might be fun to get in on some of the skyrocketing stocks. He put less than $1,500 in GameStop and AMC — the GameStop portion is now down by nearly half, and his stake in AMC lost more than 20 percent.
“I am not a gambler by nature,” he said, “and this is money I have already written off.”
Mr. Davitt, who lives in Chicago and works for a company that provides worker assistance programs for employers, figures he might as well hold on to both companies. GameStop just named several new executives, which could help inject new life into the company, he said, and AMC could see a bounce once more people start venturing out of their homes.
“If I didn’t like GameStop or AMC,” Mr. Davitt said, “I wouldn’t be finding this as enjoyable.”
Another on the Line
By almost any measure, Mr. Daumer, the Indiana teenager, is one of the winners of the GameStop trade. He more than doubled his money, even if he didn’t score the biggest possible payday.
“Do you fish?” he asked, searching for a way to explain the experience.
When you’re fishing, he said, and you feel a tug on your line, it might be just a nibble or it might be a bite. If you wait to feel a stronger tug, you risk losing the fish you didn’t know you had.
The peak, he said, was that kind of moment. He thought it was just a small nibble, and decided to wait.
“The fish got away,” he said.
But there are others out there to be hooked, he said. He’s already dabbling in shares of a penny stock, Castor Maritime, which is based in Cyprus. It’s up over 300 percent so far this year.
What kind of business is the company in?
“You know what? I wish I could tell you,” Mr. Daumer said. “I just like the numbers.”