© Reuters. FILE PHOTO: The GameStop logo is seen opposite the Reddit logo shown in this illustration.
By Krystal Hu NEW YORK (Reuters) – Eric Diaz, operations manager in Tampa, Florida, remains committed to his GameStop stock even after his abrupt retreat from the highs they reached last week. “It got personal,” he said. Like many others, Diaz first invested $ 3,000 after reading about the video game retailer’s stock on the popular Reddit WallStreetBets forum. The so-called “Reddit rally” to squeeze short sellers skyrocketed GameStop Corp (NYSE 🙂 shares from less than $ 18 a share in early January to as high as $ 483 last week. Diaz sold some to take a profit of $ 1,500 and keep the rest, 10 shares. After watching stocks tumble to close at $ 53.5 on Thursday, Diaz said he plans to buy more if the price continues to decline. “At the beginning I was investing in an idea,” Diaz said. “But after all the shenanigans when retail investors who wanted to buy were stopped from doing so, it got personal. So I’m going to hold on until it unfolds.” GameStop’s wild swings and other Reddit favorite rallies were screened as a David vs. Goliath story of individuals taking on Wall Street hedge funds. With the increase in trading volume last week, online broker Robinhood and other investment apps placed restrictions on GameStop and other stocks. The fierce rally hurt some hedge funds when they were unable to cover short positions. Still, many people on Wall Street have also made money from GameStop, while some small investors were hurt by its rapid decline. Many financial professionals had warned that the rally would not last forever. Still, the lawyers said their phones have been ringing with GameStop shareholders in hopes of recouping losses. Even during this week’s swoon, many recent Reddit posts vowed to hold GameStop until stocks “go to the moon.” “IF HE’S STILL IN, I’M STILL” Those late to the party are probably looking at losses, if they didn’t cover their long positions in some way. John Gjolaj, a restaurant manager in New York and a longtime user of Reddit’s WallStreetBets forum, invested in more than 300 GameStop shares last week at $ 269 a share. Plan to hang on. Gjolaj said he believed the GameStop team can change the company. “I hope I can sell it for about $ 500. But if it takes years, I will keep it,” Gjolaj said. “I invested in bitcoin at its peak in 2017. I can take all this volatility.” Jerry Corley, an outfielder in Arkansas, joined the WallStreetBets thread on Reddit last week and bought three shares of GameStop on Monday. In considering a loss, he was encouraged by Roaring Kitty, an online investor manager who championed GameStop and whose posts claimed he turned an investment of a few thousand dollars into millions. “He’s got his money where his mouth is. This guy isn’t dumb. That’s a great sign,” Corley said. On Wednesday, Roaring Kitty, aka DeepF *** ingValue on WallStreetBets, posted a screenshot on Twitter of GameStop’s stock, which was trading at around $ 4 in July, adding “I like the stock.” Keith Patrick Gill, a trained financial advisor behind the Roaring Kitty broadcasts, did not respond to a request for comment. His recent posts show that he still holds a position worth more than $ 8 million in stock. Some followers on Reddit posted after his tweet on Wednesday: “If it’s still in, I’m still in.” CALLS TO LAWYERS Díaz tried to circumvent Robinhood’s business restrictions using various trading platforms. But the trade limits quickly generated a backlash from US investors and lawmakers on both sides, and have also sparked lawsuits. Levin Papantonio Rafferty’s attorney, Michael Bixby, said his firm has received dozens of calls with “every type of complaint you can imagine” related to Robinhood’s handling of GameStop operations. “If you lose $ 10,000, that could be a large amount of money for the individual, but it would be difficult to justify the cost of the litigation,” Bixby said. A representative for Robinhood declined to comment on the lawsuits. Previously, the online broker said that trading restrictions were put in place because of the collateral you need to deposit required by clearing houses to support many of the trades. Matthew Schwartz, an attorney for Kass Shuler in Florida, said most of the calls he received were from people trading options that they couldn’t buy or who had traditional stocks that were restricted. The Reddit rally also had winners remaining up for grabs. Bryan Towey, a 20-year-old entrepreneur in New York, said he has earned more than 890% return on GameStop since investing in 10,000 shares at an average cost of $ 22.10 per share in early January after reading about the growth. of the company’s e-commerce sales. . Towey has gradually sold off his stakes since he hit $ 165, but he still owns 2,200 shares, hoping for another breakout. “I’m like an instinctual investor,” Towey said. “I have a good feeling about the business. If there is another bubble, I will probably get rid of it.”