ROCHESTER, Minn. — Taryn Brown was losing it as her husband, John Anderson, sent her screenshots of his GameStop shares throughout the week.
Anderson, a 32-year-old Mayo Clinic nurse and retail trader since 2015, had invested roughly $3,000 at about $60 a share in GameStop last week, seeing the future market rally for the company coming. He saw the research and information posted on the Reddit discussion forum WallStreetBets and felt the trade was foolproof.
As each photo with a steep, upward green line came in, Brown became more anxious.
“Uh, so she was freaking out,” Anderson said. “She was just so confused on why I kept holding. She was like, ‘You've got to get that out right now!’”
Anderson eventually caved, seeing the price starting to fall after the unprecedented climb. He sold half of his shares on Wednesday afternoon for $290 a share. His gains from the investment marked a new-high for him.
Anderson said the funds are going toward paying off his and Brown’s student debt, as well as their upcoming wedding ceremony with the couple having a courthouse wedding prior.
The seeds for the stock market event were planted in December when GameStop shares plummeted. GameStop had to close storefronts due to the pandemic and competition with digital sellers played a role as well. Hedge fund companies such as Citron Research and Melvin Capital noticed GameStop's struggles and started short-selling the company in January.
Short-selling is when an investor borrows a stock, sells it and then buys it back to return to the lender, hoping the price has decreased since to earn a profit.
Members on the Reddit WallStreetBets discussion forum noticed the short-selling and began buying GameStop shares the past two weeks to increase the price. The hedge funds lost billions of dollars after closing their short positions. Since Jan. 12, GameStop stock has increased by 1,700% and obtained a market capitalization of $24 billion.
“The numbers involved in this scenario are unique,” Anderson said. “You just don’t see this in the market."
When Rochester broker Matthew Rothschild purchased shares of GameStop stock last fall, he never imagined he’d see the stock boom.
Rothschild sat in disbelief Wednesday, Jan. 27, watching his small investment triple by the end of the day.
“I was kind of dumbfounded,” Rothschild said. “I was like, ‘What’s going on?’"
Rothschild owned three shares of GameStop, purchasing them roughly “between $20 and $30” prior. Wednesday, the stock initially reached $480 a share, Refinitiv data showed. Rothschild sold and reinvested into the stock that day, then sold it completely Thursday due to the market becoming “volatile.”
“The way I see it, it’s money that I never had … I figured it was a good number to sell at,” Rothschild said. “I just find the whole situation funny because it’s Reddit is trolling the market.”
GameStop stock dropped to roughly $250 a share after Reddit closed the discussion forum and online brokerages began restricting the purchase of GameStop shares Thursday morning.
Rothschild also purchased 11 shares of AMC stock at roughly $4.20 a share on Wednesday. Thursday, AMC shares climbed to $19 a share. Online brokerages such as Robinhood responded by restricting the stock from purchasing.
Stocks such as BlackBerry, Koss and Express also had purchasing restrictions placed on them, with Robinhood citing “volatility” on the stocks as well.
“Absolutely unethical,” Anderson said of the Robinhood restrictions. “That’s potential gains that people have an opportunity to make. We’re talking probably hundreds and millions of dollars they just cost their users.”
After the restrictions, Robinhood’s rating on the Google Play store fell off a cliff, from four stars to one. More than 100,000 negative comments were made in the store Thursday. Google salvaged the rating by deleting the comments, raising Robinhood back to four stars.
The stock rally has caught national attention at all levels. The U.S. Securities and Exchange Commission told Reuters it was aware of the market volatility and was working with fellow regulators to "assess the situation and review the activities of regulated entities, financial intermediaries and other market participants."
The event even caught the attention of the White House. Press Secretary Jen Psaki said Wednesday in a Reuters report that President Joe Biden’s economic team has been “monitoring the situation.”
The unprecedented week on Wall Street has left uncertainty in the market. Between social media dictating stocks, to online brokerages closing stocks for purchasing, a whole year’s worth of events in the stock market happened within the first month of 2021, and Anderson thinks the GameStop rally isn’t over yet.
“What we’ve seen hasn’t even been very volatile yet,” he said.