Photo Credit: Jakub Porzycki | NurPhoto | Getty Images
Imagine receiving a payment equal to your yearly salary. Now imagine receiving one triple of that amount, or even ten times that amount in only two weeks! Yes, two weeks is how long it took for GameStop investors to cash in their profits.
On January 19, 2021, GameStop’s share price was $37.00. A week later, one share of GameStop was worth over $300.00. It later peaked a little above $500.00, a day later before dipping down.
After the online community r/WallStreetBets notified their followers of hedge funds short selling GameStop, the forum went on to encourage their followers to buy and hold as many shares of the company as they could. Motivating followers with full page instructions and written speeches, you would think you were in a war.
“I would regularly go on the forum to receive stock tips, but when talks of the short squeeze began, everything changed. I kind of felt like I was reading pages in a world history textbook. I guess you can say it was a war. Retail investors against hedge funds,” says Sam Gray, an NYC resident.
Retail investors across the world joined together to attack the short selling of hedge funds. Millions of traders followed the r/WallStreetBets community. Focusing on GameStop, millions pumped their life savings into the stock, causing the share price to increase greatly, and hedge funds to pay. Gray states, “For a week and a half straight, I found myself reading posts on the forum for hours. I invested half of my savings account without my parents knowing. I don’t know what it was, but after taking in everything that the page was saying, I felt a feeling of empowerment. I wanted to be a part of the movement. Make a change. Let’s not forget, make some money as well of course.”
GameStop was the talk of the media. It was even recognized by Tesla owner and the richest man in the world, Elon Musk. Musk mentioned the activities of the Reddit traders in a tweet he made on Twitter, which made the stock go even higher. At that point, GameStop really stopped the game. The stock market came to a halt due to all of the attention that was put on GameStop.
“When Elon Musk tweeted, ‘GameStonks!’ on his Twitter I was ecstatic. He is known for driving prices of stocks up, and I was almost sure at that point I made the right decision. The only negative about the situation was that my entire portfolio was down during the two weeks I was in GameStop. Literally, everything was red besides GameStop…” said Gray.
Investors went on to see great gains in the stocks share prices. Gains that were life changing for some. Gray went on to say, “Before this revolt, I was a college graduate, living with my parents, paying my student loans with minimum wage paychecks. After selling my 200 shares of GameStop while it was trading at a high of $480.00, I do not have to worry about those loans anymore! With the profit, I was able to pay off my student loans, car loans, and I will now begin the process of looking for an apartment of my own…”
Retail investors shifted the culture. Coming together, not just for the money. It was bigger than the money. This movement symbolized the anger that middle- and lower-class citizens have towards big business and the rich. For too long, ways of making money have only been the way the rich would like you too, but now people will understand they can have their own way as well. Power to the people!
