Roman Tirone wasn’t bored. Tirone, 27, was running an app development company from his New York City apartment in January 2021 when he put his life savings—about $10,000—into meme stocks GameStop and AMC. “It was a combination of time spent online, and a discretionary income that I couldn’t spend on things I normally like doing because of the pandemic,” he says. “I was so ready to throw myself into something.”
Reddit has allowed us to see threads that are as famous and well known as “The Famous” WallStreetBetsHe invested some money in the stock that was the talk of internet. “It was so much fun, because it was such a thrill. And there were so many people giving you confirmation bias every step of the way, so you always felt like you were rallying for an underdog and a good cause.”
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Within months, Tirone had quit his job to work full-time in NFTs, using his experience in the meme stock market as a jumping-off point to learn about—and develop a career in—the volatile world of cryptocurrency assets. He says that meme stocks changed his life. “It prepared me for the next wave of how retail investors would now become crypto investors and NFT investors,” he says. When GME was below $80 (it would reach nearly $500) and AMC was just $8 (it could go up up to $70), he bought. “Along the way I ‘paper handed’ and bought and sold and went back and forth,” he says. (“Paper hands” are a meme stock term referring to an investor who does not stick with their investments long-term.)
“By no means was it an easy road, and I’m not a, you know, multi-millionaire,” he says; at his best, he was up about 100%. However, the true win came from the lessons learned. “I’ve now made the returns that were promised to me by investing in GME,” he says. Even after the crash of early meme stocks, it’s still his AMC stock.
Tirone is just one of many amateur investors who got on the investment train in 2021. Some investors saw huge returns. Others were not so lucky. However, many people have continued investing, finding new income sources and altering the direction of certain segments of the current investment market.
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GameStop was the first to notice this trend. A so-called short squeeze, orchestrated mostly by Redditor buzz men, sent the stock price soaring in January 2021. GME traded at more than $500 per share at its peak. This was a dramatic upswing from GME’s January $17 price. On January 28, 2021, however, some retail investment platforms, like Robinhood—where many had made their GME purchases—surprised users by instituting new trading regulations, claiming a lack of collateral in the face of the volatility of trading activity. GME stock crashed to $40 at the bottom of the freeze. GME is currently trading at around $128 after several ups/downs. The second so-called “meme stock” of this trend, AMC, rode a similar rollercoaster driven by Reddit, Discord, and social media hype, and the “confirmation bias” that people like Tirone experienced. Influential businesspeople such as Elon Musk helped Dogecoin, a meme-based cryptocurrency to join the fray in spring and winter.
The meme stock craze was not necessarily many investors’ first exposure to the stock market. It often increased their interest in the stock market, even though they already had it. “I didn’t have a philosophy, I just bought stocks here and there of companies that I liked,” says David Nathanson. Brooklyn-based Nathanson, 31, was—like Tirone—bored during the pandemic, and started buying up shares of brands he liked just for kicks: Manchester United, his favorite soccer team; Delta and JetBlue, airlines he flew regularly. Reddit was also a popular place he spent a lot time, as he has been an active observer for a long time. “It was entertaining to read because I thought it was the funniest place on the internet,” he says of subreddits like WallStreetBets. “They were actually hilarious, but I didn’t really put that much weight into what they were saying—it was just more entertaining.”
An acquaintance pointed the GameStop development to him and he thought it worth trying. He didn’t want to have FOMO, or “fear of missing out.” “I consider myself pretty logical, but at the time, I was like, I don’t know what’s going on. So I believed in it.” He bought “pretty high,” when it was already up to about $90 a share and—unfortunately—experienced the crash a few days later, after re-upping his investment. He would ultimately lose several thousand dollars. Not that he’s too concerned about it now. “Since then I’ve, as I’ve learned more, I’ve invested a lot more money into the stock market,” he says. However, he does more research into each stock before investing in cash. “What I learned, really, is to take everything with a grain of salt,” he says. He now invests regularly.
These meme stocks are often a component of an overall strategy for investing, which is usually tied to cryptocurrency prospecting. This type of investment is preferred by people who accept market volatility and high risk. Conor Davis is 32 years old and used to instruct freestyle skiers in Idaho every winter for seven year. Now, he spends his days snowmobiling, keeping his wood-heated hot tub at the perfect temperature for his evening dips—and checking his crypto accounts. Davis almost paid off the loans on his log cabin, which he built in quiet wooded valley in Stanley, ID. It’s not that Davis didn’t enjoy coaching; it’s just that he doesn’t need to do it anymore, thanks to his investments that have paid off more than enough for him to sideline his normal career. “I went from a skiing coach where I’m literally paycheck to paycheck to now it’s like, Okay, I have my year’s salary in the bank,” he says. “Investing in general has allowed me not to be scared.”
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Davis watched Reddit GME unfold from his Stanley cabin last winter. He then spent a few thousand dollars at GameStop, AMC and sold his shares in less than a week. “I probably doubled my money or something,” he says. Dogecoin was his other meme play at that point. It is a cryptocurrency coin named after the dog-eyed, grammar-impaired shiba Inu that it mascot. “There was a day when Doge went from, like—I remember buying it at two cents and it went to like, 17 cents that day,” he says. “That was one of my favorite decisions.” (Dogecoin was at $0.0041 on January 1, 2021; It hit an all-time highAmount of $0.50 for May 2021 Davis was acquired in February. He has since diversified into more traditional dividend stocks, like Chevron—“We’re not going to run out of the need for gas anytime soon,” he says with a shrug—but over 90% of his portfolio is mostly in Ethereum and Bitcoin, the meme investments a distant memory.
Still, this year’s ups and downs in crypto particularly have been difficult to manage. “I’m trying not to even look at my apps. When I look at it, it’s like, a feeling of despair,” he says. “But even though I’m down 20 grand right now, I’m still up from where I was at this time last year, right?”
A year on, there is one constant for all of these meme stock investors: they’ve kept playing the game, even if their approaches have evolved beyond taking advice from WallStreetBets and social media. Renee Russo was co-founder at a startup that uses blockchain technology. Glow Labs, looks at her experience with GME and AMC as “life-changing”—not for financial reasons, but because of the community she became exposed to. “I didn’t really care about the money,” she says. “I felt for the first time in a long time that I was part of something.” (She was successful, however, and made 500% returns on her GME and AMC buys.) She still holds some AMC shares: “People think I’m crazy, but it’s [for] that feeling of community.” Her company Glow Labs recently transitioned to becoming a web3-focused business, and Russo partially credits her time spent on Reddit and Discord during the meme stock rollercoaster as the reason she feels confident moving into this developing space.
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Like Tirone, Nathanson, and Davis, she doesn’t see the 2021 meme stock experience as a pattern that will repeat itself in quite the same way; that ship, with what Davis called a “perfect storm” moment, has sailed. Secondary meme stocks, like Tesla, Robinhood, BlackBerry, Bed Bath & Beyond, and Clover Health, found subsequent moments of glory—but have mostly settled back to pre-hype lows, and WallStreetBets today is rife with conversation about blue-chip stocks like Meta (formerly called Facebook), Costco, and Palantir instead of underdogs like AMC. The next big thing is already here, though, and it’s probably crypto-based. “This cycle is happening still, just in different forms,” Russo says. “If you look at the way people trade NFTs and are molding our community, it is around the same type of morale that the AMC and the GME holders had.”
GameStop even LaunchingA platform for NFTs in this year.
