‘To the moon’ or to a lawyer, GameStop buyers deal with inventory’s rollercoaster

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Yahoo Finance

By Krystal Hu

NEW YORK (Reuters) – Eric Diaz, an operations manager in Tampa, Florida, remains committed to his GameStop stock even after the steep retreat from the highs it hit last week. “It got personal,” he said.

Like many other people, Diaz first invested $ 3,000 after reading about the video game retailer’s stocks on the popular Reddit forum WallStreetBets. The so-called “Reddit rally,” which put pressure on shortsellers, saw GameStop Corp shares rise from below $ 18 per share to $ 483 last week in early January. Diaz sold some to take profits of $ 1,500 and keep the remainder, 10 shares.

After watching stocks fall Thursday, closing at $ 53.5, Diaz said he plans to buy more if the price continues to fall.

“First we invested in an idea,” said Diaz. “But after all the gimmicks when retail investors who wanted to buy were prevented from doing so, it got personal. So I’ll just wait for it to work out.”

The wild swings of GameStop and other Reddit rally favorites were cast as the David versus Goliath story by people raising Wall Street hedge funds. As trading volume spiked last week, online broker Robinhood and other investing apps put GameStop and other stocks on hold.

The sharp rally damaged some hedge funds when they were unable to cover short positions. Still, many people on Wall Street made money from GameStop too, while some small investors were hurt by the rapid decline.

Many finance professionals had warned that the rally couldn’t last forever. Even so, lawyers said their phones rang at GameStop shareholders in hopes of making up for losses. Even during this week’s swooning, many recently released Reddit posts pledged to hold GameStop until its stock goes “to the moon”.

“IF HE’S STILL IN, I’M STILL IN”

Those who were late for the party are likely to see losses if they haven’t somehow hedged their long positions.

The story goes on

John Gjolaj, a New York restaurant manager and long-time user of Reddit’s WallStreetBets forum, invested in over 300 GameStop shares last week at a price of $ 269 per share. He intends to hold on. Gjolaj said he believed the GameStop team could turn the company around.

“I hope I can sell it for around $ 500. But if it takes years I’ll keep it,” said Gjolaj. “I invested in Bitcoin at its peak in 2017. I can take all this volatility.”

Jerry Corley, a gardener in Arkansas, joined WallStreetBets’ RedStit thread last week and bought three shares of GameStop on Monday. Looking at a loss, he took encouragement from Roaring Kitty, the online handle of an investor who campaigned for GameStop and whose posts claimed he had turned a few thousand dollars into millions.

“He’s got his money where his mouth is. This guy’s not a dummy. That’s a great sign right there,” Corley said.

On Wednesday, Roaring Kitty, also known as DeepF *** ingValue at WallStreetBets, posted a screenshot of GameStop stock on Twitter, which was trading at around $ 4 in July, adding, “I like the stock.”

Keith Patrick Gill, a trained financial advisor behind the Roaring Kitty streams, didn’t respond to a request for comment. His recent posts show that he still holds a position worth over $ 8 million in the stock.

Some followers on Reddit posted after his Wednesday tweet: “If he’s still with me, I’m still there.”

CALLING LAWYERS

Diaz tried to bypass Robinhood’s trading restrictions using multiple trading platforms. However, the trading limits have quickly sparked a backlash from investors and US lawmakers on both sides, and litigation too.

Levin Papantonio Rafferty’s attorney Michael Bixby said his law firm had received dozens of calls with “every kind of complaint you can think of” related to Robinhood’s handling of GameStop deals.

“If you’ve lost $ 10,000 it could be a lot of money for an individual, but it would be difficult to justify the cost of litigation,” Bixby said.

A Robinhood representative declined to comment on the lawsuits. Earlier, the online broker said the trading restrictions were put in place because of the collateral needed by clearing houses to stop many of the trades.

Matthew Schwartz, attorney at Kass Shuler in Florida, said most of the calls came from individuals trading options they couldn’t buy or who had traditional stocks that were restricted.

The Reddit rally also had winners staying in the game. Bryan Towey, a 20-year-old New York entrepreneur, said he had over 890% returns on GameStop after investing in 10,000 shares at an average price of $ 22.10 per share in early January after talking about the growth in sales of the company’s e-commerce business.

Towey has been gradually selling its holdings since they hit $ 165 but still owns 2,200 stocks in hopes of another breakout.

“I’m like a good investor,” said Towey. “I have a good feeling for the business. If there’s another bubble, I’ll probably get rid of it.”

(Additional reporting by Ross Kerber, Suzanne Barlyn and Megan Davies, writing by Megan Davies; editing by David Gregorio)