As GameStop’s stock plunged nearly 60% Tuesday, the online horde that had raced to invest in the “meme stock” scrambled to reckon with the financial bloodshed, wavering between a desire to sell and settle for heavy losses or stick with their online peers who had admonished them to “hold the line.”
In interviews Tuesday with novice traders on r/wallstreetbets, the gleefully reckless Reddit forum that helped fuel the onslaught, several said they were holding out hope that the hyperinflated stock would turn around.
But others expressed deep turmoil, posting screenshots from their online banks and brokerages to the forum that, in some cases, showed hundreds of thousands of dollars vanishing in a matter of hours.
GameStop stock’s climb in recent days captured the international spotlight as a “David vs. Goliath” tale for the digital age: A madcap web of everyday joes winning billions of dollars from short-selling hedge funds that had bet on the stock’s collapse.
But with the stock having plunged 80% since last week’s peak, the whiplash also highlights how so many investors, lured by the promise of a gold rush, have been quickly dismantled, with help from stock-trading discussion boards and apps that make it easier than ever to invest – and lose – a fortune.
Evan Oosterink, a 19-year-old college student in the Netherlands, knew almost nothing about GameStop when in December he chose the company for one of his first big stock-market bets, calling it some kind of “American games shop where you can get all your games,” he said.
But his favorite Reddit forum, wallstreetbets, was increasingly obsessed with it, casting it as a way to crush billionaires, move the market and profit heavily in the process. Energized by its rising price, Oosterink said he invested another 8,000 euros last month – nearly $10,000, mostly from years of savings from his parents and some government college loans – leaving only about 30 euros in his personal account.
Had he sold last week, he could have pocketed a typical American’s full year’s salary. But as the stock has crumbled, he has turned to the forum for reassurance, posting a screenshot from his online-banking app showing the day’s losses, totaling about $9,000. He said he was “deep in losses but holding will prevail,” and included the emoji for a rocket and “diamond hands,” the forum’s lingo for not selling when a stock nose-dives.
“Being a part of wallstreetbets, it’s like a religion you’re devoted to,” he said on a Tuesday phone call from his parents’ home, where, in his bedroom, he has hung up a printed-out meme image featuring Jesus Christ, the Virgin Mary and Elon Musk, GameStop’s logo shining from above.
“There’s this enormous power driving Wallstreetbets, this energy: ‘Hold the line. We aren’t giving in. We aren’t giving up. We are in for that ride to that moon,'” he said, reiterating several of the forum’s catchphrases. “That is the power that keeps everyone holding their shares.”
Wallstreetbets has long prided itself on wild, enthusiastic and often illogical stock-market gambles. Traders – who call themselves, affectionately, an offensive term for people with learning disabilities – built their own insular subculture as they egged each other on for profit, camaraderie and the thrill of the hunt.
Unlike more sanitized online investment forums, wallstreetbets specialized in “loss porn”: Blood-red graphs from members charting their own busted bets, miserable market turns and thousands – sometimes hundreds of thousands – of losses.
The worst-hit posters got a kind of consolation prize in “upvotes,” one of Reddit’s many currencies, an ultimately meaningless number that Reddit’s algorithms analyze when deciding which posts are most widely seen. The audience, meanwhile, just got to enjoy, filling comments sections with sucks-to-be-you winces and encouragements to trade more.
Implicit in the forum’s bargain, and its name, was that these trades were all high-risk, high-reward bets from traders doing it for the laughs. Reddit’s chief executive Steve Huffman told the New York Times this week that wallstreetbets’ users didn’t need protection because they have generally known what they were getting into: “In my history of watching that community, most of them lose money. And that’s a trade-off they do willingly for that sense of community and fun.”
But with GameStop’s soaring, the wallstreetbets casino has become more thoroughly a mix of sophisticated traders and suckers. The 8-million-member forum has led Reddit’s most popular communities for days, more than quadrupling in size since the year began, and jaded forum veterans say they’re increasingly outnumbered by newbies chasing quick and massive returns.
Investors plowed billions of dollars through Robinhood and other online brokerages into GameStop in recent weeks, but the share price has crumbled as traders abandon ship. The beleaguered video game chain peaked this week around $438 and closed on Tuesday at roughly $90, its biggest one-day decline yet.
And as GameStop’s stock price has crumbled, posters have increasingly admonished traders with tough-love reminders that they are just as likely to go broke as strike it rich.
“This is a community of full blown first class . . . degenerates which take pleasure in posting losses accumulating into the millions every” month, said one expletive-filled post on Tuesday. It received more than 50,000 ‘upvotes’.
This is not a “Disney ferry ‘One-Wish-comes-true’ show,” said the poster, “SimplyPwned.” “This is the place where one wants to enjoy the sado-masochistic part of the . . . capitalistic system we are living in. . . . No sane long-term investor would consider to invest into any of these investments – this is about ‘get rich or die trying!'”
Members said the community has always offered a jovial intimacy and sense of belonging, with a sharp stock-jock edge. But in recent days, the forum has dissolved into conspiracy theories and infighting.
While some posters have argued it was time to direct their cash fire hose into other meme stocks – the movie-theater company AMC, or silver, as in, the metal – others have decried those posts as a sinister distraction. Still others have worried that the forum has been invaded, surveilled or compromised by the Wall Street giants they pledged to fight all along.
“As the cheerleading and rage against the machine dies down,” Mark Taylor, a sales trader at Mirabaud Securities, told Bloomberg on Tuesday, “the man on the street is left holding the bag again.”
Wallstreetbets posters on Tuesday cast about for explanations of the sell-off, including restricted trading by retail brokerages or a “ladder attack” from market foes. They’ve also voiced notes of betrayal against some high-profile sellers, including the Barstool Sports blog founder Dave Portnoy, who said last week that he would hold AMC and other meme stocks “till the death” but tweeted Tuesday that he had sold for a loss of roughly $700,000. “What happened to your diamond hands, Davey?” one forum poster said.
Forum members on Tuesday also raced to share their own “loss porn”: One poster said he was “vomiting” and that their “life savings [were] on the line.” Another poster included an image of their losses over what appeared to be online math homework.
“This hurts like no other… We must hold. Who’s with me?” wrote the user “SenorHugs” in a post showing a one-day loss of $10,000 hours before the stock continued its slide.
Keith Gill, the Massachusetts financial adviser who kicked off the GameStop cash blitz under the online pen names “DeepF—ingValue” and “RoaringKitty,” and who had celebrated the stock’s climb with videos of himself dipping a chicken tender into a glass of champagne, posted an update after the market closed showing that his investments had plunged $13.6 million on Tuesday alone. He still showed total gains of roughly $7.6 million.
Several other wallstreetbets believers said they aren’t budging, regardless of the damage. The Reddit poster Volkswagens1, who declined to give his name but said he lives in the Pacific Northwest, showed The Post an image indicating roughly $400,000 in potential GameStop losses from the day but insisted he would not sell.
He said he has “been poor for too long” and works “a god awful amount of hours for a garbage company” and sees betting on popular “meme stocks” as a way to potentially strike it big.
“You can’t get good returns waiting on garbage stocks to increase. Who wants to invest in some boomer a– SEARS or Macys stock, just to watch it tank,” he said in a conversation on Reddit with The Post.
He said he’s poured most of his saving and checking accounts into the stocks and spent the last week “doing as much research as possible,” including wrecking his sleep and calling in sick to work, to make sure he was staying on top of the market’s moves.
“I’m slightly agitated, but in the end, its just a gamble and Im willing to risk it all,” he wrote. “Ill have diamond hands until the end.”