In 2020, when Jimmy Pham was a 20-year-old college junior, his school moved online when the pandemic hit. He dropped out, still living at his parent’s home in Orange County, California, helping them with rent and unhappily working as a remote tech for uBreakiFix, making $19.30 per hour.
He was intrigued when he first heard that people were buying stock in GameStop on the Reddit forum WallStreetBets. It first seemed conspiratorial, and he wasn’t immediately sold. But as more and more people posted about their confidence in the stock, Pham became convinced. He bought shares and since then, he’s been putting the majority of every paycheck into the stock.
“I’m not going to sell until I see change happen,” said Pham. “I actually do not care about the money anymore.”
Pham is part of a significant group of people who are still holding on to their GameStop options, watching their money increase while betting on GameStop’s transition from a brick-and-mortar video game business to tech company and insisting that this is a way to change the system. For investors like Pham, it has changed their lives.
On January 11, 2021, GameStop exploded into mainstream awareness when Chewy co-founder and investor Ryan Cohen was appointed to the board after investing $76 million in 2020 and acquiring a 12.9% stake in the company. Cohen’s appointment caused the stock to soar, buyers to rally, and galvanized a movement that started on Reddit to buy shares of GameStop, where users took cues from “GameStop OGs,” including Keith Gill — a.k.a. Roaring Kitty — who had been heavily investing in the company since 2019. These Redditors rallied around the stock not only as a way to get rich, but also to protest the greed of the Wall Street hedge funds which were shorting the stock.
“This greed by the short sellers to have GameStop go bankrupt — ironically, they now saved GameStop for probably forever,” said Justin Dopierala, the founder of DOMO Capital and portfolio manager, who bought GameStop in 2019 and sold in January 2020. “Now that GameStop’s been able to sell shares and raise money and billions of dollars, they can transform the company however they want.”
Redditors against hedge funds became a David versus Goliath battle, which was aggravated even further when investing app Robinhood suspended trading of GameStop on January 28, 2021, citing the “recent volatility.” The media coverage became more frenzied as politicians on both sides of the aisle weighed in, criticizing the company and calling for hearings that were consequently held in February and March.
After all of this occurred in the early spring of 2021, coverage died down.
“It’s a really interesting trusting exercise with strangers on the Internet, on Reddit.”
Pham now owns 105 shares of the stock, valued at around $10,000. He said that at this point, nothing could convince him to sell, despite the fact that his family has warned him of the dangers of investing and urged him to cash out while he can. But Pham’s family, which he said is “riding the poverty line,” is at the forefront of his mind when he considers what he’s doing.
“This is about changing the future for the better and possibly becoming set for life and setting my family up for generations,” said Pham. “If I’m wrong, who cares? I’m just going to take it off my taxes and work it off for the next couple of years.”
Lauren McKenzie, 38, in Surprise, Arizona, is also holding on to her shares of GameStop. She bought in after Robinhood took away the buy button, after learning more about the stocks on Reddit.
“It’s a really interesting trusting exercise with strangers on the Internet, on Reddit,” said McKenzie. “And it felt like mostly dudes and it felt very lonely.”
McKenzie doesn’t have a lot of money — she takes care of her mom and her aunt and is the sole source of income for her household. When she first bought shares of GameStop, she felt guilty, like she wasn’t contributing enough. In November, McKenzie had problems with her family’s only car, and to pay for the expenses, she cashed out the profit she’d made, which was around $2,500.
“I didn’t like to sell them, but I had to do what I had to do,” said McKenzie. “It’s life and it’s complicated.”
McKenzie, along with other investors, believes that GameStop is undergoing a transformation into a tech company, helmed by Cohen, who was appointed chairman of the board in June. This transformation, McKenzie thinks, will start with an NFT marketplace that the company itself has hinted at with an NFT-dedicated website and by posting NFT-related jobs. Yet on an even broader scale, she believes this is the start of building the Metaverse, which she described as the “next version of the internet”– decentralized, based on cryptocurrency, and resembling the virtual reality universe in the book and movie Ready Player One.
Not everyone subscribes to these theories, however.
Luis Mejia worked at a GameStop when he was younger. Now 38, he’s a software engineer in Miami. Mejia was initially skeptical when his friend advised him to invest in November 2020, believing that the company’s business model was unsustainable and harboring suspicions about how the market was behaving during the pandemic. Yet when Robinhood took away the buy button, Mejia knew it was “time to get in the fight,” recalling bitterly how he lost $100,000 in the 2008 stock market crash.
“It was 10 years of being burned,” Mejia said. “This is my way to reinforce the help and let’s see where it goes from there.”
Mejia initially invested $10,000 in January and was sitting on over $40,000 at the time of reporting.
Theories abound about what will happen next in the GameStop saga and the meaning of Ryan Cohen’s indecipherable tweets. Mejia, though, doesn’t speculate and tries to stay grounded.
“There are people who live and breathe GameStop and it can feel a little bit like they drank the Kool-Aid,” said Mejia.
Yet he has no intentions to sell because he knows he would regret it if the stock went up even further.
“It would be like I had the lottery ticket and I threw it in the garbage,” Mejia said.