Can’t stop, won’t stop shorting stocks

Julia Weinrod

When my friend told me he made $50 off of AMC stock in one day, I knew I wanted to get in on the action. I logged into my Charles Schwab brokerage account and reallocated some money into shares of AMC, GameStop, BlackBerry, and Nokia.

Before, these stocks had been seen as worthless, but were now increasing in value from 300 percent to up to 1200 percent.

After I bought shares, I looked around the social media network that had started the trend, Reddit. The subreddit r/WallStreetBets had popularized these stocks and were encouraging everyone to buy shares. I should have been worried by the word “bets,” but at the time I did not think about the way it implied a ton of potential loss. I could only focus on posts where people had invested thousands of dollars and made more profit than I could imagine.

Energy radiated from the site. I bought more shares of GameStop and felt exhilarated. It felt like I was part of something great and that rewards would be coming soon.

It also almost felt like a social movement. During the pandemic, hedge funds have come out ahead while hundreds of thousands of people seek unemployment aid. People were taking revenge on hedge funds as those that had bet against GameStop (and other stocks) could hypothetically face infinite losses. One hedge fund, Melvin Capital, lost 53 percent of the $13 billion they managed at the start of the month.

Soon, the excitement on the site became outrage when Robinhood, a trading app popular with small investors, blocked buyers from purchasing AMC, GameStop, and other companies that were skyrocketing. People were rightfully mad that they were being blocked from sharing in the profits. GameStop had gone from being worth around $20 a share to peaking at almost $500.

I was surprised to see many big names including Alexandria Ocasio-Cortez, Ted Cruz, and Mark Cuban, speak out against Robinhood’s response to the frenzy and call for further investigation and dozens of lawsuits against Robinhood. It had gone from innocent fun to having real-world consequences.

I was facing consequences, too. My shares had been plunging, and I hadn’t made money since the first day. GME has been dropping fairly steadily since February 1, so I finally sold all my shares, swallowing a total loss of over $400. I learned my lesson about betting on the stock market and plan on returning to the boring buy-and-hold grind.