On Jan. 28, a good friend began excitedly texting me that she and her husband were going to invest in the stock market.
"What stock?" I asked. "Apple, Google? Perhaps Disney?"
No. Surprisingly, the answer was AMC Entertainment Holdings, which owns the movie-theater chain I had spent countless weekends at in pre-COVID-19 days but hadn’t been to now in more than a year. The company stock had been fluctuating because of the pandemic, so I couldn’t quite figure out why my friend thought it would be wise to invest in the company now.
AMC, it turned out, was next on a list of financially downtrodden companies that a group of users on the subreddit r/WallStreetBets had pegged as a surefire way to make easy money using the same tactics that had helped GameStop’s stock prices shoot up.
Her realtor, who had caught onto the craze in time, purchased GameStop stock earlier that morning and cashed out just hours later, making a $2,000 profit. She was hooked.
Although I’ve been playing video games since I was old enough to hold a controller, I’ve never been heavily involved in the online gaming community, and my experience with the stock market is cursory at best. So, by the time I heard about GameStop, I had missed the boat. My friend, however, was determined to catch the next wave, and make it big.
In case you’ve lived in a bunker these past few weeks, the story goes like this: Some casual investors figured out a way to beat Wall Street short-sellers who were manipulating the stock to drive its price down at their own game, and effectively purchased GameStop stock en masse, enough to temporarily drive the price up and make some people significant money overnight. Some of them did it in an attempt to score a big win over the traders and companies they felt took advantage of the system; others just did it for fun and to make a quick buck. My friend, whom I’ll call "M," did it as a distraction from the doldrums of life in quarantine, and because it was a trendy new way to do a little online gambling.
While much of the media coverage focused on amateur investors who were trying to take down hedge funds and prove that our financial system is broken, there are people who saw this as an exciting rollercoaster to jump on, even if there was a high risk of crashing once the ride was over. Some people made it big with their GameStop stock, and others lost it all. But for these investors, like M, a little danger was worth it to be a part of something that distracted them from the continuing presence of COVID-19.
A Facebook friend was savvy enough to invest in GameStop when the market was still trending upward, but he said he held out too long and lost out on several hundred dollars. He was able to recoup his loss and then some, however, with a separate investment in a cryptocurrency called Dogecoin, a so-called "joke" currency that was also trending along with GameStop, AMC and Nokia. He chalked it up to a lesson well learned about the market.
"To me, this was the equivalent of someone in the office collecting 20 bucks from everyone to all go in on the lottery," he wrote in an text message. "Like, I know it probably won’t be anything [in the end], but I don’t want to be the one left out if everyone wins."
So what about M? Although she is still firmly invested in AMC, she is down about half of her investment, with no plans to pull out anytime soon. But she did make some money on her cryptocurrency investment.
Does she have any regrets, and would she do it again? Even though her AMC stock is down, she has faith that the market will trend upward once more, and she’ll at least make her money back.
That’s still too risky for this penny-pincher.
Michael Cusanelli is digital content manager for Newsday Opinion.