A Reddit user dished on what it was like to be part of the “mother of all short squeezes,” which drove the cost of GameStop, a flailing video game company, to unprecedented highs and left wealthy hedge fund investors who shorted the stock in the lurch.
“We’re all, at the end of the day, a bunch of schmucks who’re having fun,” Reddit user Fage138 told Quartz, which didn’t publish the man’s real name.
The engineering student at the University of Alberta in Canada and regular on the WallStreetBets Reddit page told the outlet he trades stocks on the side for fun and first bought shares of GameStop in mid-November when they were just $13 a share, he told the outlet.
The Minecraft nerd, who’s been in the group since 2018, invested about $650 in around 50 shares and over the next two months, bought a couple hundred more as the stock price ballooned and thrust the market into chaos.
He said the majority of the group are people in their 20s or 30s who aren’t making millions trading in the market — at most, “they’re going to be making or losing $100,000 or so,” Fage138 explained.
“The most I know that anyone here ever lost is $2.5 million.”
The forum has long existed as a place for amateur traders to discuss profitable stock purchases or risky, high-reward bets but it’s also shaped by a firm distrust of Wall Street, the Redditor said.
“A lot of people here were early in their careers back when 2008 happened,” Fage138 explained to Quartz.
“They lost their jobs, and maybe their money. And then they saw that the banks and other institutional investors who leveraged the economy to the moon and back—they suffered no consequences.”
That sentiment, in part, is what fueled the squeeze that left traditional investors and hedge funds an estimated $5 billion in the red for betting against GameStop, the Independent reported, citing an analysis from data analytics company S3.
As GameStop, a hugely popular video game company in the 2000s that started to tank with the advent of online gaming, dipped further into the red and looked to be following down the path of Blockbuster, one WallStreetBets user tried to prop it up.
Redditor DeepF–kingValue posted numerous videos on YouTube explaining why GameStop wasn’t headed for bankruptcy — he said they had cash on hand, were moving to digital retail and were slowly climbing out of the depths, Quartz reported.
The cost of the stock rose and when it got to $10 a share, his fellow Redditors started paying attention and buying. By mid-January, the stock soared 60%.
Fage138 said at the time, the big joke on the forum was everyone should hold their stocks until the price rose to $420.69 — a reference to jokes involving drugs and sex. It was indicative of Reddit’s overall culture as a meeting ground for irreverent nerds who have a penchant for sophomoric humor and would rather socialize online.
But then the traditional investors, who’d shorted the stock, started fighting back by trashing GameStop publicly so the cost would come back down and they could recoup their losses. That’s when WallStreetBets went to war and developed “a vendetta” against short-sellers, Fage138 said.
An army of average Joes rallied and started buying up more stock of the fading company and drove the cost higher and higher as the short sellers struggled to keep up. With a little help from a tweet by Elon Musk, GameStop’s value ballooned about 12 billion dollars in just over three weeks.
“That’s when we started saying: ‘Don’t sell till it hits $1,000 a share,’” Fage138 recalled.
The plan worked — at least temporarily before major investing apps like Robinhood halted all trading of GameStop stock Thursday. DeepF–kingValue is believed to have turned a $50,000 investment into at least $14 million, Quartz reported, while others have shared about their ability to pay off massive student loan debts.
“I love you guys 😘,” one WallStreetBets user posted over the weekend — before GameStop’s volatility caught the eye of the White House — with a screenshot showing a $23,504.45 consolidated loan payment
The user wrote in the comments it was their “final payment” for their student loans and they never “thought I would have this paid off so soon.”
Early Thursday, amid chaotic, massive swings in GameStop’s valuation, a halt on trading, and a federal, class action lawsuit filed against Robinhood, WallStreetBets users implored others to remain calm and hang tight.
“IMPORTANT!! THERE ARE NO SELLERS!!! DO NOT PANIC IF YOU SEE PRICE DROP” user SaintHakop wrote with a graph of GameStop’s tumbling valuation.
“HOLD THE LINE! UPVOTE SO PEOPLE DON’T PANIC.”