The truth is that Roman Tirone was 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.”
So, thanks to exposure to Reddit threads like the famous WallStreetBets, he sunk some cash into the stocks that were the talk of the 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.”
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. Meme stocks, he says now, changed his life. “It prepared me for the next wave of how retail investors would now become crypto investors and NFT investors,” he says. He bought in January, when GME was under $80 (it would go up to nearly $500), and AMC was under $8 (it would go up to $70). “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%. But the real win was the lessons learned along the way. “I’ve now made the returns that were promised to me by investing in GME,” he says. And even over a year after the early meme stock craze and ensuing crash, he still does hold AMC stock.
Tirone is one of thousands of amateur investors who jumped onto an eyebrow-raising investment bandwagon in 2021, finding they had the income, savings, and time to dabble in day trading and play with the stock market. For some, returns were considerable. For others, luck ran out early. But many have continued to invest, discovering a new source of potential income, and changing the shape and tone of some segments of the investment world today.
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The trend began with GameStop, the struggling video game retailer. In January 2021, a so-called short squeeze orchestrated primarily by Redditor hype men sent its stock price rocketing up; at its peak, GME was trading at over $500 a share, a wild upswing from its early January price at around $17. 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. The ensuing freeze caused GME stock to crash, bottoming out at about $40. (Today, after ongoing ups and downs, GME trades around $128.) 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. Meme-based cryptocurrencies like Dogecoin also joined the fray with a boost from influential businesspeople like Elon Musk that winter and spring.
The meme stock craze was not necessarily many investors’ first exposure to the stock market. But it often boosted their preexisting interest. “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. He also was spending a lot of time on Reddit, where he had long been a passive observer. “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.”
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Still, when a friend flagged the GameStop developments to him, he decided it was worth a shot. 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. Ultimately, he would lose a few thousand dollars in the process. 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. (He does more research in each stock before dumping in cash these days, however.) “What I learned, really, is to take everything with a grain of salt,” he says. Investing is now a regular hobby for him.
For many, these meme stocks were just one component of a broader investment strategy, often tied to cryptocurrency prospecting, and favored by those who tolerate risk and market volatility well. Conor Davis, 32, used to coach teens in backcountry skiing every winter in Idaho for seven years. 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. Over the past year, Davis has almost finished paying off his loans for his log cabin in a quiet stretch of woods in the secluded valley of 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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From his cabin in Stanley last winter, Davis idly watched the Reddit GME conversation unfold and dropped a few thousand dollars on GameStop and AMC, before selling his shares within a week. “I probably doubled my money or something,” he says. His other meme play during that time was with Dogecoin, a cryptocurrency coin that gets its name from the grammatically-inept shiba inu dog that is its 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 a high of $0.50 in May 2021. Davis purchased in late January.) 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, co-founder of blockchain-based startup 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.”
Even GameStop is launching a platform for NFTs this year.
