MILAN — There were a few moments of silence when I told my girlfriend what I'd done. I'd kept the information from her for a few days, fearing her reaction and forced to explain: I had chucked a few hundred dollars at shares of the so-called "meme stock" extraordinaire GameStop on the New York Stock Exchange. Then, still dissatisfied, I'd come to own shares of AMC, BlackBerry, Plug Power. I'd never even heard of these companies until I saw them, well, trending on the internet. And in just a few clicks, the same internet made it easy to invest my hard-earned money in these stocks.
As soon as I confessed, her lips arched into an unsure smile — one that looked to be hiding several emotions: confusion, incredulity, anger, compassion. "What are you doing?" was the rhetorical (and otherwise) question.
It's true I'm not the kind of person you'd think of as a meme stock or cryptocurrency trader — at least not in the way they've been portrayed in the media: geeky types in their early 20s, sometimes fresh out of a U.S. college, who see the stock market as a giant casino they now have access to enter with (or without) their savings to try to hit it big. Instead, I'm a 29-year-old freelance journalist from Italy who never cared much about money or computers.
They are inherently risky because they run on hype
And yet here I was, having excitedly chucked $2,000 into obscure stocks, hiding the information from those around me, and struggling to understand how things had come to be this way.
My meme stock journey was about to teach me a lesson or three — about finance, the world, and myself.
Meme stocks are like all other stocks, except they are traded not because of their companies' prowess, but because — for one reason or another — they're trending on social media. The term became popular when the shares of GameStop, a languishing video game retailer, rose 1,700% in a month last January and February for no particular business reason: GameStop had gone viral on a Reddit forum called Wall Street Bets. Meme stocks are inherently risky because you're buying and selling stuff whose value has nothing to do with objective criteria like business parameters: They run on hype. For this reason, the trades tend to yield spectacular gains or gut-wrenching losses; there is no middle ground.
I started buying meme stocks almost by chance. When the pandemic flared up in northern Italy, where I live and work, I was hired to report on it for a handful of U.S. publications, who paid me in dollars. But with the value of the dollar plummeting, I decided against exchanging it into euros, which made the money a strange beast: a sum that I owned but couldn't use. So, I wondered if I could make a few extra bucks by investing online.
I had watched some of my peers, and my twin brother, making a few hundred, sometimes thousand dollars quickly as the stock market began to boom after the first wave of COVID had passed. This was also fueled by how easy it is for an individual to invest in the stock market today, thanks to the explosion of personal finance apps like Robinhood, which last week announced it hoped to raise $100 million by going public.
Because Robinhood is not available outside the U.S., I had to turn to another app: Revolut, the app I already used for my day-to-day digital spending. I found out that it allowed users to stock up on anything from stock shares to cryptocurrency to gold at the tap of the screen and with minimal fees. I did not double my money, but my first trades gained me a few extra dollars. By the end of 2020, I started looking for new shares to buy.
One day, my brother giggled as he told me about people on the "Wall Street Bets' group on the social media Reddit making ludicrous amounts of money with GameStop shares. Some posted their gains online, and a few reached six digits. The logic seemed sound, the money seemed easy: around 140% of GameStop stocks were sold short at the time: many people had bet on their price to fall, borrowing and selling shares, hoping to be able to buy them back for cheaper later. This means that more people had to buy back GameStop shares than there were out there: by the law of demand and supply, it seemed like a ticking time bomb — in the good sense.
With the price still relatively low, I purchased myself a few shares through Revolut, then tapped on the sell button when the price spiked suddenly. It went well: just like that, in a matter of minutes, I made the same amount of money I would make in four days of journalistic research. And so, right after I sold, I looked again to where to put my money next: AMC, BlackBerry, Plug Power.
Trading meme stocks, as long as you don't go bankrupt, is fun. This is partly due to the online community at Wall Street Bets, with its peculiar culture and jargon. Almost everything is expressed through memes, and Reddit's algorithms will push the funniest ones to your screen. People go out of their way to make fun of conventional financial wisdom and YOLO their savings on ridiculous trades. They mock each other as "apes' for stupid bets and boast when they win big that they would buy gifts for their "wife's boyfriend." There is also the sport of "loss porn" posts, recounting the supposed spectacular side effects of bad finance. One guy posted that he was "financially ruined" after he invested his life savings in ornamental gourds, hoping to capitalize on an emerging trend. Stuck with a shipment of "gargantuan" gourds from Argentina, he claimed to have looked for ways to turn them into musical instruments.
There is a typically millennial element of meme stocks.
But there was another more serious side of Wall Street Bets that emerged with sagas like GameStop, one that resonated with my still living sense of injustice. About the time GameStop shares skyrocketed, users began writing posts about how the 2007-08 crash had destroyed their lives; how their parents lost their jobs; how they had to sell their homes; how they'd felt suicidal. Some were gambling their retirement funds on GameStop. Others fanned the flames, noting how the hedge fund bosses they were trying to beat by inflating the value of GameStop shares had screens in their offices linked to CCTV on their premium car collections and yachts.
I came to see this as the typically millennial element of meme stocks. People came to them for a variety of reasons, but meme stocks seemed to me to prey on the deep-rooted, disillusioned nihilism that cloaks the anger of young people against the hand they were dealt in the global economy. Hope is not something many of us — children of the global financial crisis, globalization, the pandemic — see in the economy or their careers. Salaries across most sectors have stalled for years. Inequality is rising across the West.
One night shortly after I'd made my GameStop trade, I had a dream. I'd wound up in a dark and massive empty room where I could see none of its walls or boundaries. In front of me stood a chart and a handful of red and green lights, showing how my money was growing or decreasing. Suddenly, the chart started cratering. It went down quickly, inexorably as I gasped for breath and time, paralyzed as to what to do next. Quickly it went to 0 — all my money was gone. I awoke drenched in sweat.
I was beginning to realize how big an emotional toll gambling was taking on my mental health: the dream was one of the ways that my mind was trying to put itself back in charge of the flurry of anxiety, excitement, and fear that meme stocks generated. There were other signs: my devouring of financial news, my sullen mood when a trade had me lose money, my scouring forums for ideas, and constant chatting about it with others.
It was then that I decided to wind down and get out of meme stocks. I'd had a losing position in AMC for some months when the stock skyrocketed again in June. I closed it as soon as it allowed me to break even — later I discovered that I had unwittingly renounced hefty gains doing so.
Through trading stocks, I learned about myself and other young people, and experientially, I'm glad to have gone through it
I am still recovering, and still have a few dollars invested in some stocks and funds. But I've come to terms with what drew me into the memes — the injustice, the community — and all the ways it was damaging me: anxiety, constant distraction, a collapse in productivity in my real profession.
Over time, I've also tried to think of the less obvious opposite side: had trading meme stocks given me something? For sure, I had picked up a few lessons about basic finance and impulsivity. I learned about myself and other young people, and experientially, I'm glad to have gone through it.
The other obvious thing meme stocks have left me is money. I made a few hundred dollars at the tap of a button with GameStop and AMC, and I'm glad to have exited meme stocks with some gains.
If you don't count BlackBerry, that is. I bought that one on a high, it plummeted shortly after, and I still own some shares. I'm down 40%.