The Funny and Very Sad Fall of GameStop Explains Everything You Need to Know About Investing
Throws life savings into a meme because Reddit told him to
Emotional investing is not a good idea. Greed, FOMO, or hype are all bad reasons to invest. The psychological impact is much worse from losing out on investment than making it big on one.
All that said, last week I got emotional. So much was happening surrounding GameStop (GME), and it was happening so fast. Wall Street was losing, the internet was winning, and there were a lot of fire memes along the way.
Here’s one of my favorites,
I couldn’t help myself and got caught up in the hype losing nearly $1,000 in the process. I got lucky, I lost what I could lose. Others however were crushed by making potentially life-changing mistakes (And I’d be remiss not to mention some who made out with thousands, even millions of dollars)
Subreddit WallStreetBets — the online community that orchestrated everything — is a dangerous place. I say this out of love because there are many amazing and hilarious people over there. Moreover, no one even talked about the WallStreetBet’s users who donated their GameStop earnings to St. Judes or bought Nintendo Switches for kids.
They’re a good community all in all.
However, it’s dangerous in the sense that there’s a lot of misinformation, mixed in with memes, all wrapped up in a few million people hyping up certain stocks. It’s dangerous because we’re playing with money here, and a lot of people got burned this week.
In my opinion, WallStreetBets should be NSFW the same way a porn site is. The advice on this community could ruin your life.
So, let’s go through a journey of where WallStreetBets started at the beginning of this GameStop hype to where they are now.
Hold the line
“This morning, I watched my net worth plummet by $600k. My parents were begging me to sell saying that people are selling off and I was going to be left behind. I knew better thanks to the information you guys equipped me with so i held. I love you all and i look forward to seeing everyone on the other side.”
— u/TheRealAsaAkira
This was posted right before GME started to crash. Based on this person’s recent posts, they are not happy.
Not Financial Advice
“There will be a GME gamma squeeze tomorrow.
Hold tight and wait for the short squeeze.”
https://isthesqueezesquoze.com/
💎🙌🏼🚀🚀🚀🚀
“Not financial advice!”
— u/retrocla
This person was expecting to sell his shares at $10,000 a pop. At the time of this article, GME is selling for $63.43. Anyone who invested in GME at the $300+ mark lost almost 80% of their investment.
He listened to his wife’s boyfriend
I borrowed enough for 2 more shares from my wife’s boyfriend. Fuck these nerds 🚀🚀🚀🚀
35k to 5mil to 300k
This guy went from 35k to 5mil, back to $360,000. He didn’t sell at 5mil because he wanted to hold for the brotherhood on Reddit. At least he made $300,000.
Now deleted post
“From $458,414 last week to $47k today. Years of savings to build my dream house CAME to STOP. All my options expire on the 19th and no hope for me to recover unless GME hit $350 next week. I am not SELLING. I rather see this burn to the ground, than sell and cash out $47k now.”
This is one of those guys who lost 80% of his initial investment. Based on one of his recent posts, he’s “panicking a bit.”
Not financial advice pt. 2
“DO NOT SELL AT 1k
they probably know that many are asking themselves if they should sell at 1k or not what the hedge funds might do it probably let the price go up to 1k and make another ladder attack to make it seem like the squeeze has happened, therefore making other people sell their positions. DONT FALL FOR IT !!”
🙌🏻💎🙌🏻💎🙌🏻💎
“not financial advice. i just like the stock”
u/fox_303
“This is the way” (comment thread on a hype post)
Fearmongering ensues
“I wish I sold at $350” “I wish I sold at $300” “I wish I sold at $250” “I wish I sold at $200” “I wish I sold at $150” “I wish I sold at $100” ←- you are here “I wish I sold at $50”
WallStreetBets users are beginning to think the end is near to make money on GME. It doesn’t help them many people are kicking them while they’re down like this user here. Although, he might be right.
And then there’s this person
“my only income is that I’m part time barista
as soon as direct deposit hit last night I put the whole thing in a shiny new TDA account. this morning, while on my break sipping shitty, room-temperature free coffee, i spent almost all of it on one single share of GME
I live with my parents, flunked out of college, and still have 20k in student loans that I have to start paying to this August. if this shit goes tits-up my life still sucks cock but otherwise I’m suddenly able to cut into my loan hard and maybe fix some of the rust on my ’03 nissan shitbox so I can get a couple more years out of it.”
*💎👐 until I die.
*“Diamond hands” means you won’t ever sell your shares even if the price keeps dropping like crazy. It’s starkly contrasted by “paper hands,” who are people who sold too early before the big GME short squeeze.
Ok, so what does any of this mean?
I don’t know.
I want Reddit and other online communities to organize more in the future and bring power to the common man. However, there will be a lot more casualties along the way. And those casualties will be regular people who maybe can’t afford to be a casualty — both fiscally and mentally.
Where does that leave GameStop’s biggest losers? I don’t know, because Wall Street is doing fine, and so are the hedge funds that lost billions. Normal people, who invested in GME at $320? Not so much.
Let me be clear though, just because WallStreetBets is dangerous doesn’t mean it should be banned or censored. People should just know what they’re getting into.
Many people in the Subreddit assumed they’d put in $5,000 and get $20,000 back from GME. Now that they’ve lost more than 80% of that, these people are panicking and asking for a doover.
That’s not how any of this works, unfortunately.
One last thing: We are living in a meme world now. Memes infiltrated mainstream marketing, they’ve infiltrated the White House during the Obama and Trump presidencies, and now memes are in our money.
Memes might look stupid, but some are created by geniuses. After all, memes swayed the outcomes of the last two elections. Even the self-proclaimed morons on WallStreetBets proved to be so smart they got the attention of Mark Cuban, Elon Musk, and Chamath Palihapitiya.
Pay attention to what happens next, because I think our world is going to have a major shift if memes continue to sink into every facet of our lives.
Thanks for reading, I think I lost a few brain cells trying to gather all the posts for this one. WallStreetBets is an amazing community — I spent the better half of my week laughing my ass off from their memes. I don’t want to put down anyone in this article, but just highlight the dangers of herd thinking. Hopefully, WSB can become a community-led hedgefund with enough power to sway the market, as they’ve already proven.
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