Who is investing in GameStop, the shocking Wall Street action?

For some, it was the desire to make money. For others, it was fear of losing, anger from elites or idle curiosity about what was possible in a world where it is increasingly difficult to distinguish the jokes of the internet from real life.

United by these disparate motivations, a legion of individual investors – along with some powerful Wall Street whales – turned GameStop, a loss-making video game retail chain, into the hottest action in years. After appreciating more than 1,000% since the beginning of the year, its shares jumped an additional 68% on Friday to $ 325, leaving the company with a value in excess of $ 22 billion on paper.

GameStop’s hasty rise cost the hedge funds that were selling its shares to the extreme, betting that a traditional chain would never recover from the double-stroke of the COVID-19 restrictions and a long-term shift to e-commerce. It was a historic stroke of luck for those who saw these short bets as an opportunity to squeeze hedge funds, forcing them to buy shares at high prices, and used online forums like Reddit’s WallStreetBets to coordinate their moves and encourage each other.

Exactly what the success of your endeavor means, personally or for the financial system, whether it was a unique feat or the beginning of something bigger, whether money was the icing on the cake or a lifeline – it all depends on which ones you question.

For Ryan Zamo, a Pasadena businessman, buying GameStop was something to do with money he didn’t need in the first place.

Zamo, 31, owns two companies, an organic skin care company and a television and digital content producer. He has been trading stocks for about five years and uses a Robinhood account for what he calls his YOLO bets (you only live once). “Don’t open an account unless you have money to lose,” he says.

Zamo read about investing in GameStop through the WallStreetBets Reddit forum. His initial investment of about $ 40,000 is now worth about $ 80,000, he said. A $ 1,000 stake in BlackBerry, whose shares have also increased as a result of related activities, is now worth about $ 18,000. He plans to reinvest those earnings into stocks.

He has been plagued by accusations that people like him are engaged in illegal market manipulation or intend to attack anyone.

“We don’t have a mission to set Wall Street on fire,” he said.

Whoever this “we” are, does not include John Motter.

“My goal is not to get rich with this, my goal is to bankrupt these billionaires,” said Motter, 33, who never bought a stock in his life before taking a larger amount of money than he received from the federal government for “stimmy” verification. of the coronavirus and dumped it on GameStop this week. “I would buy magic beans on the street from a stranger if he said they have the potential to ruin a billionaire’s life.”

After buying the shares, Motter, a Los Angeles community organizer who is currently unemployed, put on a jacket and tie, poured himself some whiskey and filmed a video to post to TikTok, joking that he had become a capitalist.

He was inspired by the WallStreetBets forum, which he calls a “phenomenal” example of mass organization. He plans to “hold the line” and refuse to sell his shares until next week, even if it means losing everything. “I don’t believe in making money that way, so I don’t feel comfortable getting rich from it,” he said. “A lot of people are really angry and no one has forgotten 2008.”

For Christopher Wehkamp, ​​the chance to hurt the Wall Street titans was part of the appeal.

“Even beyond the profit motive, there was definitely a reason to give many billionaires something that is coming for them – I loved that idea,” said Wehkamp, ​​41, a Dallas voice actor. “As someone who lived through the 2008 crash and the 2020 pandemic, it looks like it will take a long time.”

Wehkamp heard about GameStop on Twitter and visited WallStreetBets on Reddit to find out more. He made what he called a “three-digit investment”, which is now “four-digit”.

“I’m definitely holding on,” said Wehkamp, ​​who usually invests in more conservative assets, such as mutual funds. “I don’t really know if I hope to make any money from it, but I love the idea of ​​going bankrupt some hedge funds – that would be fantastic.”

Initial investor Sriram Krishnan, a consultant with the meditation software company Calm, was also interested in GameStop after seeing it take over his timeline on Twitter. He felt the urge to “be part of the spirit of the age” and bought a small amount of GameStop shares on Tuesday for $ 90.

Krishnan, 36, who lives in San Francisco, quickly dismissed the actions, saying to himself “this is not what I do”. Selling for $ 85, he annotated on Twitter that he was probably the “only person in [the] world that lost money in GME. “

Then, the former Tinder and Spotify employee had a second set of ideas. Seeing the raise again, he reinvested the same amount at $ 120. He now sold most of that tranche as well, but kept a share for emotional reasons.

“I am advocating solidarity with others,” he said. “It’s something I don’t normally do – invest in the public market – but it was good to invest in something alongside hundreds of thousands of other people.”

“The information asymmetry on which hedge funds and other institutional investors depended is no longer the case,” he added. “Retail investors can move markets around.”

Ricky, a cryptocurrency and real estate investor living in the northeastern United States, sees the GameStop saga in similar terms. Following his attorney’s advice, he asked that his real name not be released.

Active on the WallStreetBets forum, he bought GameStop shares five months ago, believing they were undervalued and seeing a chance to take advantage of the hedge funds that had accumulated in short bets. “We were expecting a squeeze, but I don’t think any of us expected it to take off like that,” he said. “It really grew like a snowball and became a movement. I spent the whole week riding an exercise bike with my laptop connected because the adrenaline is so intense that I have to burn it to stop shaking. ”

Ricky, who is in his 20s, sold some of his holdings on GameStop last week, earning “enough to not have to work any more this year”. But he maintains a long position, although he knows that a fall is inevitable. “Honestly, it’s a fellowship now. And I trust the brotherhood. In addition, BlackRock just bought a massive position this week. ”

Among those who hope that GameStop has not yet found its peak is Issac Mooring II. A college football coach in Houston, Mooring bought a piece of the company’s stock last year when Madden NFL 21, a video game that his four children were excited about, was released in August but was sold shortly thereafter. “I’m sorry 1,000%,” he said.

He tried to buy it back on Thursday, but failed because Robinhood froze the deal and finally managed to snap up some shares on Friday. “I hope to catch a wave where it grows and, if I start to see that it is losing strength, I will sell it,” he said. “I am a family man, I have a personal interest in doing as much as I can to build my family’s future.”

For Julie Fredrickson, founder and investor of a start-up in Boulder, Colorado, GameStop is a symbol not of David and Goliath’s struggle between people’s power and big money, but the way technology is accelerating the pace of change in unpredictable ways. She and her husband, Alex Miller, bought a stock on Wednesday, when it cost $ 327, “just for fun,” after following the drama around it on Twitter and Reddit.

At the close of trading on Friday, they fell $ 2 in their investment. But the same market forces were kinder to another bet they had made a few days earlier, on an increase in the VIX, a market volatility index.

“We bought it last Friday expecting it to rise in the next 30 to 45 days because of possible disruptions to the most viral strains of COVID that are emerging,” she said. “We didn’t expect it to increase much this week with fishing from redditors. But [it] it was so good that we ended up selling the position to get a 40% gain. ”

Even financial professionals cannot say where GameStop’s wild journey will end. But predict that more chaos fueled by the Internet is on its way? Lately, this is a bet that never seems to be missing.

Times staff editors Jeff Bercovici and Andrea Chang contributed to this report.