Economy

Confessions Of A Recovering Meme Stock Trader

A person looks at the screen on their mobile phone, which shows the 'Gamestop' logo
A person looks at the screen on their mobile phone, which shows the 'Gamestop' logo
Alessio Perrone

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%.

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Future

7 Ways The Pandemic May Change The Airline Industry For Good

Will flying be greener? More comfortable? Less frequent? As the world eyes a post-COVID reality, we look at ways the airline industry has been changing through a pandemic that has devastated air travel.

Ready for (a different kind of) takeoff?

Carl-Johan Karlsson

It's hard to overstate the damage the pandemic has had on the airline industry, with global revenues dropping by 40% in 2020 and dozens of airlines around the world filing for bankruptcy. One moment last year when the gravity became particularly apparent was when Asian carriers (in countries with low COVID-19 rates) began offering "flights to nowhere" — starting and ending at the same airport as a way to earn some cash from would-be travelers who missed the in-flight experience.

More than a year later today, experts believe that air traffic won't return to normal levels until 2024.


But beyond the financial woes, the unprecedented slowdown in air travel may bring some silver linings as key aspects of the industry are bound to change once back in full spin, with some longer-term effects on aviation already emerging. Here are some major transformations to expect in the coming years:

Cleaner aviation fuel

The U.S. administration of President Joe Biden and the airline industry recently agreed to the ambitious goal of replacing all jet fuel with sustainable alternatives by 2050. Already in a decade, the U.S. aims to produce three billion gallons of sustainable fuel — about one-tenth of current total use — from waste, plants and other organic matter.

While greening the world's road transport has long been at the top of the climate agenda, aviation is not even included under the Paris Agreement. But with air travel responsible for roughly 12% of all CO2 emissions from transport, and stricter international regulation on the horizon, the industry is increasingly seeking sustainable alternatives to petroleum-based fuel.

Fees imposed on the airline industry should be funneled into a climate fund.

In Germany, state broadcaster Deutsche Welle reports that the world's first factory producing CO2-neutral kerosene recently started operations in the town of Wertle, in Lower Saxony. The plant, for which Lufthansa is set to become the pilot customer, will produce CO2-neutral kerosene through a circular production cycle incorporating sustainable and green energy sources and raw materials. Energy is supplied through wind turbines from the surrounding area, while the fuel's main ingredients are water and waste-generated CO2 coming from a nearby biogas plant.

Farther north, Norwegian Air Shuttle has recently submitted a recommendation to the government that fees imposed on the airline industry should be funneled into a climate fund aimed at developing cleaner aviation fuel, according to Norwegian news site E24. The airline also suggested that the government significantly reduce the tax burden on the industry over a longer period to allow airlines to recover from the pandemic.

Black-and-white photo of an ariplane shot from below flying across the sky and leaving condensation trails

High-flying ambitions for the sector

Joel & Jasmin Førestbird

Hydrogen and electrification

Some airline manufacturers are betting on hydrogen, with research suggesting that the abundant resource has the potential to match the flight distances and payload of a current fossil-fuel aircraft. If derived from renewable resources like sun and wind power, hydrogen — with an energy-density almost three times that of gasoline or diesel — could work as a fully sustainable aviation fuel that emits only water.

One example comes out of California, where fuel-cell specialist HyPoint has entered a partnership with Pennsylvania-based Piasecki Aircraft Corporation to manufacture 650-kilowatt hydrogen fuel cell systems for aircrafts. According to HyPoint, the system — scheduled for commercial availability product by 2025 — will have four times the energy density of existing lithium-ion batteries and double the specific power of existing hydrogen fuel-cell systems.

Meanwhile, Rolls-Royce is looking to smash the speed record of electrical flights with a newly designed 23-foot-long model. Christened the Spirit of Innovation, the small plane took off for the first time earlier this month and successfully managed a 15-minute long test flight. However, the company has announced plans to fly the machine faster than 300 mph (480 km/h) before the year is out, and also to sell similar propulsion systems to companies developing electrical air taxis or small commuter planes.

New aircraft designs

Airlines are also upgrading aircraft design to become more eco-friendly. Air France just received its first upgrade of a single-aisle, medium-haul aircraft in 33 years. Fleet director Nicolas Bertrand told French daily Les Echos that the new A220 — that will replace the old A320 model — will reduce operating costs by 10%, fuel consumption and CO2 emissions by 20% and noise footprint by 34%.

International first class will be very nearly a thing of the past.

The pandemic has also ushered in a new era of consumer demand where privacy and personal space is put above luxury. The retirement of older aircraft caused by COVID-19 means that international first class — already in steady decline over the last decades — will be very nearly a thing of the past. Instead, airplane manufacturers around the world (including Delta, China Eastern, JetBlue, British Airways and Shanghai Airlines) are betting on a new generation of super-business minisuites where passengers have a privacy door. The idea, which was introduced by Qatar Airways in 2017, is to offer more personal space than in regular business class but without the lavishness of first class.

Aerial view of Rome's Fiumicino airport

Aerial view of Rome's Fiumicino airport

commons.wikimedia.org

Hygiene rankings  

Rome's Fiumicino Airport has become the first in the world to earn "the COVID-19 5-Star Airport Rating" from Skytrax, an international airline and airport review and ranking site, Italian daily La Repubblica reports. Skytrax, which publishes a yearly annual ranking of the world's best airports and issues the World Airport Awards, this year created a second list to specifically call out airports with the best health and hygiene standards.

Smoother check-in

​The pandemic has also accelerated the shift towards contactless traveling, with more airports harnessing the power of biometrics — such as facial recognition or fever screening — to reduce touchpoints and human contact. Similar technology can also be used to more efficiently scan physical objects, such as explosive detection. Ultimately, passengers will be able to "check-in" and go through a security screening anywhere at the airports, removing queues and bottlenecks.

Data privacy issues

​However, as pointed out in Canadian publication The Lawyer's Daily, increased use of AI and biometrics also means increased privacy concerns. For example, health and hygiene measures like digital vaccine passports also mean that airports can collect data on who has been vaccinated and the type of vaccine used.

Photo of planes at Auckland airport, New Zealand

Auckland Airport, New Zealand

Douglas Bagg

The billion-dollar question: Will we fly less?

At the end of the day, even with all these (mostly positive) changes that we've seen take shape over the past 18 months, the industry faces major uncertainty about whether air travel will ever return to the pre-COVID levels. Not only are people wary about being in crowded and closed airplanes, but the worth of long-distance business travel in particular is being questioned as many have seen that meetings can function remotely, via Zoom and other online apps.

Trying to forecast the future, experts point to the years following the 9/11 terrorist attacks as at least a partial blueprint for what a recovery might look like in the years ahead. Twenty years ago, as passenger enthusiasm for flying waned amid security fears following the attacks, airlines were forced to cancel flights and put planes into storage.

40% of Swedes intend to travel less

According to McKinsey, leisure trips and visits to family and friends rebounded faster than business flights, which took four years to return to pre-crisis levels in the UK. This time too, business travel is expected to lag, with the consulting firm estimating only 80% recovery of pre-pandemic levels by 2024.

But the COVID-19 crisis also came at a time when passengers were already rethinking their travel habits due to climate concerns, while worldwide lockdowns have ushered in a new era of remote working. In Sweden, a survey by the country's largest research company shows that 40% of the population intend to travel less even after the pandemic ends. Similarly in the UK, nearly 60% of adults said during the spring they intended to fly less after being vaccinated against COVID-19 — with climate change cited as a top reason for people wanting to reduce their number of flights, according to research by the University of Bristol.

At the same time, major companies are increasingly forced to face the music of the environmental movement, with several corporations rolling out climate targets over the last few years. Today, five of the 10 biggest buyers of corporate air travel in the US are technology companies: Amazon, IBM, Google, Apple and Microsoft, according to Taipei Times, all of which have set individual targets for environmental stewardship. As such, the era of flying across the Atlantic for a two-hour executive meeting is likely in its dying days.

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