Reddit traders have lost millions on GameStop. But many refuse to stop.

SAround mid-January, Seth Thomas, 29, came to an inescapable conclusion: GameStop was a deeply undervalued company, poised for a substantial return, and he planned to double previous purchases of company shares, thus putting a large part of his retirement and that of his wife. savings in it. Ultimately, Thomas amassed nearly 23.000 shares – its base price is around $ 10 a share thanks to lucky options trades – and, unsurprisingly, investing quickly absorbed much of their attention. “In my conversations with my wife, it didn’t just become ‘Hey, this is interesting.’ It became our talk when we woke up, before we went to bed, when we had breakfast, ”he says.

During last week’s sky-high highs when GameStop surpassed $ 400 per share, the Thomases were sitting on around $ 9 million. There is much less below them now. GameStop is down nearly 80% from its Jan. 28 highs, a drop that Thomas can only like “a roller coaster ride.” A very expensive roller coaster ride. The one on which he nevertheless pledged to stay. Like many others who have followed the Reddit-fueled boom in GameStop, he is firmly holding on to his position. “I haven’t taken any money out, so let’s see what happens,” says Thomas, a freelance software engineer in Baltimore, Maryland. “I was able to stay fairly calm, and I certainly attribute a lot of that to these discussions with my wife. She is very level-headed. And I think we’re both very risk tolerant.

Almost two weeks ago, an avalanche of average investors like Thomas plunged into GameStop after reading the investment idea on a Reddit stock trading forum, WallStreetBets. The resulting frenzy has already created a huge amount of head-turning moments: one unlucky title enjoying itself several times. Hedge fund short sellers ousted as GameStop skyrocketed. Brokers who closed trading – and drew the ire of their clients, who saw the decision as the financial institution working to protect themselves. (Brokerages said it wasn’t and cited a perilous lack of capital to complete trades amid the surprising onslaught of deals.) And then lowering of GameStop’s course of action like an earth meteor.

The impact? GameStop investors have seen what could have been wild, once-in-a-lifetime wins slip through their fingers, with many wallets losing tens of thousands of dollars – in some cases millions of dollars – almost overnight . “There will be people who suffered significant losses, who bought it at the top – who had no idea what they were doing and only looked at it with zeal and probably a little jealousy. [of] want to get involved, ”says David Mazza, CEO of Direxion, an asset management company specializing in the type of risky ETF favored by the WallStreetBets crowd. “We live in a populist environment where information spreads via smartphones and social networks, where good situations can turn bad very quickly. “

A handful of Redditors are in the mouth about the situation. “Barring any deaths in the family, this has been the most devastating two weeks of my life,” says Will Brown, a 30-year-old fish farmer from North Carolina. He attempted to reverse a loss of $ 20,000 by trading other stocks by putting his remaining capital – a few thousand dollars – in GameStop options. At one point, he calculates that he had a position worth about $ 300,000, a sum almost entirely evaporated. “I accept that I have no one to blame for this except myself. “

But in the unexpected final chapter of the GameStop saga, the majority of Redditors are bullish, with many declaring an absolute commitment to hold onto the company’s stock, the consequences be damned, the opposite reaction you would expect from investors recently. victims of financial madness. .

The Maryland Thomases belong to a singular set among Redditors in their gathered belief that GameStop represents a valuable long-term investment. Seth Thomas attributes the view to hours spent researching the business. In his study, he focused on the company’s new resolve to replace brick-and-mortar stores with an online presence, as well as stocks initially traded with less than once sales. (A sign of an immensely undervalued stock or a stock not worth owning depending on the prospect.) Thomas was further supported by a recent investment in the company by Ryan cohen, founder of, the e-pet retailer sold to Amazon for $ 3.35 billion in 2017; he saw Cohen’s presence as validation of the company’s attempt to gain a foothold on the web. “I would never put that much money into play if I didn’t go and say to myself, ‘Okay, that makes sense,’” he says.

Others are more like John Simerlink, a 24-year-old software engineer in Columbus, Ohio: they didn’t play much initially and are not at all enveloped in the idea of ​​a great wasted treasure. In his case, his stash of GameStop titles has grown from $ 1,200 last week to $ 500 today. “I don’t have a lot of money lying around. And I would never put more than a small amount into these kinds of actions, ”he said. In a somewhat similar place is Ramon Figueroa, a 39-year-old physicist in Dallas: “My personal situation is not going to ruin my finances.” When the value of his GameStop shares declined by $ 220,000 in one day, he took a screenshot of his brokerage account and posted it on WallStreetBets, contributing to a specific sub-genre of catharitic content known as the name “pornography loss”. “I don’t lose my house or anything in this business. This is only part of my portfolio.

But the attitude that prevails on WallStreetBets is rooted in something more philosophical. They see their continued investment as a perpetual indictment on Wall Street, driven by the fury of brokerage houses such as Robinhood and Interactive Brokers limiting their ability to trade GameStop. They hope that this will attract the attention of authorities ready to impose immediate sanctions and to think about long-term reforms to reduce the advantage of institutions over ordinary investors. “It’s an anarchist attitude. Burn it all, ”says Justin Gainer, 30, of Chicago. “Eat the rich. Fk them.” He continues to wait for a position that was once worth over $ 100,000, hoping that the stock price will rise again, renewing the pressure on short-selling financial institutions. “I’m not here to cost anyone’s life, but like, do you have to sell some boats?” I have no problem with that.

Trevor Aganis, a 22-year-old player from Kansas, strongly agrees with Gainer. “There is inherent corruption within our financial system in the United States,” he says. “I think it’s very important to highlight and show what’s going on and how blatant it is.” Aganis didn’t have a lot of capital to devote to the goal. He bought his first share of GameStop for around $ 80, selling it for $ 94. (“I did it on paper,” he says, using some of the coded language enjoyed by WallStreetBets. In this case, someone with hands on paper doesn’t have the proper conviction in a trade.) He bought two more stocks for over $ 300, most of what he earns in his paycheck from a home loan refinancing company – and still has them. “It can certainly be a movement,” he says. “Even if we don’t profit from it, it can open up the public’s view on the subject. “

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