Reddit’s takeover of Wall Street continues as Reddit users still hold major stock in companies that investors were betting against, including GameStop and AMC, with the cryptocurrency Dogecoin also seeing a rise.
Over the last few months, a group of Redditors on the forum r/wallstreetbets have planned to invest in these depreciating companies, hoping to push their market value “to the moon,” or as high as possible, in order to fight back against those who were betting on these stocks to drop.
With Redditors investing heavily, Wall Street investors were forced to buy their way out of their bets, pushing GameStop stock even higher.
GameStop, which was valued at $20 less than a month ago, eventually jumped up to $347.51 on Jan. 27. As of Feb. 1, GameStop’s stock was valued at around $185 with the number jumping back and forth and investors debating whether to sell or hold their shares.
David Pedersen, a Long Beach State graduate who works as a property assistant on campus, said he has no previous background experience investing, but got “excited about all the hype and I wanted to join the revolution.”
Pedersen was introduced to investing through his coworker and eventually saw more about what was going on with the stock market and GameStop on the Internet.
So, he invested in GameStop, Nokia, AMC and the meme cryptocurrency Dogecoin because he wanted to be a part of the ongoing investors who are “banding together to take down the big players who have always run the system.”
But to his surprise, Pedersen saw a significant gain from his investment in Dogecoin, which reached highs of eight and nine cents throughout January before dipping back to three and a half cents in February.
“It is a little bit addicting, especially when you see those numbers turn green,” Pedersen said. “AMC and Nokia and GameStop have kinda gone down and I think that’s due to market manipulation from these hedge funds, but hopefully we’ll see it balance out over this week.”
As an investor, Pederson said he hopes to see hedge funds fall as several positive stories have come to light showing people who have gained thousands through investing and been able to afford basic necessities due to the recent influx in the market value of these companies.
Jake Corbin, a second-year business major at CSULB, said he found out about the recent stock-craze through his mentor and thought it was “an amazing thing to do for the little guy.”
“The stock market is taken advantage of by the elites, saying that you need to sell in a stock, waiting for people to sell, and then buying the newly sold stock for cheap bucks,” Corbin said. “So, the fact that normal people are now doing [this] is making them mad [as] they are losing their money.”
Corbin said that while he did personally not invest due to the recent restrictions set up by investment apps like Robinhood, his cousin made $1,000 after investing in GameStop this past month.
The restrictions set forth by Robinhood prevented its users from buying Reddit-induced volatile stocks, like GameStop and AMC, after the company was asked for $3 billion by the National Securities Clearing Corp. to meet clearinghouse deposit requirements, CEO Vlad Tenev told Elon Musk in a livestream on the social network application Clubhouse.
In a recent email, Robinhood assured its users that it was not trying to bail out hedge funds but, instead, was limiting stocks to ensure the company could meet their deposit obligations, eventually raising $3.4 billion to fund the recent customer growth.
Jimmy Gomez, a CSULB graduate who majored in accounting, began investing a little over a year ago.
Gomez said he was first introduced to the investing app, Robinhood, until he took his first finance class at CSULB, but it wasn’t until the coronavirus pandemic began that he “took the opportunity” to purchase stocks.
He bought “cheap” stocks, spreading a $100 investment across companies he thought would rise in the short-term, including some oil companies.
In just a couple of months, Gomez turned his $100 investment into $700. After seeing his gain, Gomez said he sought to invest in more companies and started doing more research.
“It’s like the casino, man,” Gomez said. “Once you start winning money, you’re like ‘one more dollar, one more dollar.’”
In total, Gomez said he was able to make $1,000 after investing $600 last year. But this year, he invested $2,500 in AMC and biotechnology stocks hoping that they will rise in the long term.
A Dogecoin investor, Gomez said he didn’t know it was a meme at first and only bought into it because of the surrounding hype. He invested $40, seeing a $140 net gain, which he lost in less than 24 hours as the coin went down in market value.
Gomez added that the long-term plan seems to be holding enough stock in these companies, like GameStop and AMC, until the Wall Street investors lose enough money to stop betting against them, saving them for the time being.
“People should invest with what they’re comfortable with losing,” Gomez said. “This thing could go down any day; the only reason GameStop is staying a little high is because the big bettors, they haven’t sold, but the moment they sell that thing is going to dip.”