Salvador Vergara was so excited about GameStop at the end of January that he took out a $20,000 personal loan and used it to buy shares. Then the buzzy stock dropped almost 80%.
Vergara, a 25-year-old security guard in Virginia, began saving four years ago to determine that he wanted to retire soon. To save his money, he drives the 1998 Honda Civic, eats a lot of rice and lives with his dad. He stashed his assets mainly in diversified index funds, which are now worth around $50,000. Then Vergara, a long-time reader of the WallStreetBets page on Reddit, saw others post about buying GameStop shares and the big increase in stock.
Instead he obtained a personal loan from a credit union with an 11.19% interest rate and used it to fund much of his GameStop purchases. He bought a share of $234 each. GameStop shares started about $19 a year, zoomed to nearly $350 at the end of January, and then began to spiral down to earth. The shares closed at $52.40 on 12 February, down 85% from the nearest high.
He decided to keep shares, as he believes in the recovery of the company, he said and used his paycheque to cover monthly personally borrowing payments. Once the pandemic comes to an end, he hopes to return home, save and start a charity. He said that the loss of GameStop set back those plans about six months.
It is much easier to daily investors to bring money to stocks like GameStop through free trading and easy-to-use applications. Brokerage apps like Robinhood Markets attract hordes of new users who are looking for both fun and jackpot in a world that is not subject to foreign travel, live entertainment, and other normal hobbies.
Patrick Wesolowski studied his portfolio once a week before the pandemic. Then the customers of its dog walking company in Chicago stopped on holiday and began to work from home, shrink his earnings and giving him a lot of time away. The 31-year-older began spend more time looking for inventories in his $15,000 portfolio with a sluggish company.
Wesolowski’s smartphone has been picked up in recent months to more often check the balance of brokerage investments with Fidelity Investments. He followed the thrill around GameStop and agreed to put in $3,000 when shares were reaching $300. He then reviewed his portfolio every 10 minutes on his telephone. He first felt queasy while watching the stock drop, but then he became comfortable with it.
GameStop was more than an investment for many. “I knew this was inherently the wrong move,” he said when Tony Moy bought about $1,200, two at $379 and two more, a couple of days later at $228.
When the stock soon lost much of their value, Moy wasn’t shocked. He was more eager, an odd reader at WallStreetBets, to drive hedge funds into line with losses. Some of the hedge funds that cut the stock – wagering on the price – suffered great losses, while others managed to get money during the turmoil.
After an abysmal year, the company was the way to Moy’s grievances, a “virtual protest.” In 2020, the Chicago artist lost much of his sales after the pandemic struck a large number of meetings where his work was sold at comics events. He also had a poor Covid-19 case, which left him months coughing. He said that his good investments helped him get through financially. His GameStop shares are kept as a reminder.
