![](\"https:\/\/static01.nyt.com\/newsgraphics\/2021\/02\/02\/gamestop-stock\/0c533cfb059f39ac286c117b068108ddba35462d\/gamestop-stock-335.png\")
<\/p>\nGameStop, amateur investors like to say, is going to the moon.<\/p>\n
In a language all their own \u2014 with rocket ship emojis and unbreakable \u201cdiamond hands\u201d \u2014 these online investors insist the struggling video-game retailer\u2019s stock is about to soar even higher than last week\u2019s spike, and urge one another to hold on tight.<\/p>\n
But another big drop on Tuesday \u2014 GameStop\u2019s shares have fallen 72 percent over the last two days \u2014 is testing their stomachs.<\/p>\n
Tigran Avetisian, 30, a chemical engineer outside Boston, put about $40,000 into GameStop in the past two weeks, including $20,000 from his individual retirement account when the price was $275 a share. He\u2019s down $10,000 after Tuesday\u2019s plunge.<\/p>\n
\u201cFor a little while, it was just free money for everybody,\u201d said Mr. Avetisian, who was up $80,000 at one point and still hopes to turn a profit when he decides to sell. \u201cBut part of the stock market is knowing when to get out.\u201d<\/p>\n
The GameStop roller coaster has wiped out wealth almost as fast as it created it last week. Tuesday\u2019s 60 percent drop left the share price at $90, or about $14 higher than it closed last Monday, just before the rally really took off.<\/p>\n
Since its peak of $483 on Thursday morning, GameStop\u2019s shares are down 81 percent. On paper, that means $27 billion in market value has disappeared, much of it from the brokerage accounts of small retail investors.<\/p>\n
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$500<\/p>\n
GameStop stock price<\/p>\n
5-minute intervals<\/p>\n
400<\/p>\n
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JAN.<\/p>\n
21<\/p>\n
FEB.<\/p>\n
1<\/p>\n
22<\/p>\n
25<\/p>\n
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27<\/p>\n
28<\/p>\n
29<\/p>\n
2<\/p>\n
![](\"https:\/\/static01.nyt.com\/newsgraphics\/2021\/02\/02\/gamestop-stock\/0c533cfb059f39ac286c117b068108ddba35462d\/gamestop-stock-600.png\")
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$500<\/p>\n
GameStop stock price<\/p>\n
5-minute intervals<\/p>\n
400<\/p>\n
300<\/p>\n
200<\/p>\n
100<\/p>\n
JAN. 21<\/p>\n
22<\/p>\n
25<\/p>\n
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27<\/p>\n
28<\/p>\n
29<\/p>\n
FEB. 1<\/p>\n
2<\/p>\n
Source: Refinitiv<\/p>\n
By The New York Times<\/p>\n
But many small investors \u2014 even some who caught the fever only last week \u2014 believe the stock will rally again. And even if it doesn\u2019t, their personal losses will be an unimportant detail in a crusade against traditional Wall Street powers.<\/p>\n
\u201cIf my entire position in GameStop went to zero, I\u2019d be OK with it,\u201d said Gregory Lu, a 24-year-old law student from San Diego who posts on the WallStreetBets Reddit forum, where many users hope to use GameStop to stick it to hedge funds that bet against its shares.<\/p>\n
\u201cWe\u2019re not interested in so much the means we would get personally,\u201d he said, \u201cbut what we hope the rest of the world sees and what the hedge funds get as punishment for what they have been doing.\u201d<\/p>\n
In the last week, Mr. Lu has spent about $2,500 buying GameStop shares and $750 on AMC Entertainment, the movie theater chain. He was undeterred by GameStop\u2019s fall, dismissing it as a blip before the price rises again. \u201cI\u2019m not worried about any kind of dips,\u201d he said.<\/p>\n
On Reddit, where the WallStreetBets forum has gained more than six million users since the GameStop madness began, many amateur traders insisted that the share price was destined to reach $1,000.<\/p>\n
![](\"https:\/\/static01.nyt.com\/images\/2021\/02\/02\/business\/02GameStop-02\/02GameStop-02-articleLarge.jpg\")
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And on Tuesday, the billionaire Mark Cuban logged into the forum and encouraged users to keep holding the stock \u201cif you can afford to.\u201d<\/p>\n
Popular online brokers like Robinhood have restricted trading in GameStop and other highly volatile stocks, he noted, putting artificial limits on demand. Once those restrictions are lifted, \u201cthen we will see what WSB is really made of,\u201d Mr. Cuban wrote, using shorthand for the forum\u2019s name. \u201cThat is when you get to make it all work.\u201d<\/p>\n
The online frenzy that has engulfed GameStop is, at its heart, a classic stock-market strategy of big Wall Street investors that has been embraced by retail investors. Acting en masse, they have bid up shares that other investors \u2014 in this case some hedge funds, including Melvin Capital \u2014 had bet against. Called a short squeeze, the idea is to put pressure on the short sellers, who had sold borrowed shares with the intention of repurchasing them at a lower price. The shorts would be forced to buy the rising shares to minimize their losses, accelerating the rise.<\/p>\n
But there is an inherent tension between the twin goals for GameStop expressed by Reddit-based investors, pressuring the shorts out of the stock and trying to push the price to $1,000: If the shorts are pressed into an unconditional surrender, it will bleed their demand for shares.<\/p>\n
There are signs that is happening: Short interest \u2014 the number of shares of a company held short \u2014 as a percentage of available shares of GameStop has declined sharply, from close to 60 percent in January to 34 percent on Monday, according to data from S3 Partners, a firm that tracks short-selling activity. That just means that hedge funds were exiting their short positions in GameStop.<\/p>\n
\u201cWhat happens after the shorts are out?\u201d asked Brad Golding, a portfolio manager at Christofferson, Robb & Company, a private money-management firm. (Mr. Golding said his firm had no position in GameStop.) \u201cJust from a technical standpoint, who\u2019s left to buy? Nobody.\u201d<\/p>\n
When betting on a single stock, timing is everything.<\/p>\n
For those who bought shares early on (or option contracts allowing them to buy shares at a low price), selling high means big profits. It\u2019s still possible to make money if they miss the peak, but they can also lose if the price plummets before they can sell.<\/p>\n
Spencer Anderson of Shoreline, Wash., an aquatics director at a Y.M.C.A. branch, put more than $10,000 into GameStop and AMC last week. He has lost more than half of it.<\/p>\n
\u201cI am planning on holding for now,\u201d said Mr. Anderson, 25, who began to lurk on the WallStreetBets forum a week ago. \u201cI will see how this volatility plays out today. But I might be liquidating at the end of the week or next.\u201d<\/p>\n
Knowing that big investors have lost at their own game, he said, \u201cIf I lose $6,000, between that and everything that happened with the market, I wouldn\u2019t regret it.\u201d<\/p>\n
Not everyone sees it that way.<\/p>\n
\u201cI\u2019ve had at least three, four guys confide in me that they\u2019ve lost money and they\u2019re never going to invest again,\u201d said Tobi Alli, an amateur trader from Bowie, Md., who last week bought 80 shares of AMC and 50 shares of Nokia, two other previously unremarkable stocks that have rallied as part of a rebellion against hedge funds.<\/p>\n
Mr. Alli said he would have walked away with a tidy gain had he sold earlier, and now he\u2019s down $800 on his initial investment. But he said he was not even thinking about gains anymore. Instead, holding on to his shares is a protest against the brokerages that have instituted certain limits or restrictions on trading of volatile stocks.<\/p>\n
Mr. Alli, who owns a small multimedia company, is among those who believe that brokerages \u2014 like the one he uses, TD Ameritrade \u2014 imposed certain limits under pressure from the hedge funds that he and his fellow retailers have been trying to squeeze.<\/p>\n
\u201cYou know that you may go into it and lose, and I was ready for that,\u201d said Mr. Alli, who follows Twitter accounts that post WallStreetBets content. \u201cBut what I wasn\u2019t ready to do was to lose based on manipulation from billionaire guys who are stopping people from doing what is their legal right.\u201d<\/p>\n
For investors who aren\u2019t interested in a crusade, the big swings and high stakes are nerve-racking.<\/p>\n
Ian Poppel, 23, a wildland firefighter in Winnipeg, Manitoba, invested $18,000 \u2014 equivalent to an entire fire season\u2019s salary \u2014 into GameStop over three days, just before the stock took off. He cashed out last Wednesday, a day before the rally peaked.<\/p>\n
\u201cI didn\u2019t sleep,\u201d said Mr. Poppel, who started trading stocks as a hobby during the off-season. \u201cI didn\u2019t really eat those couple days. I was so stressed about how that trade would go.\u201d<\/p>\n
He netted about $40,000, a sum he called \u201clife-changing money.\u201d But he knows it had nothing to do with investing skill.<\/p>\n
\u201cI lucked out,\u201d he said, \u201cand I see people online who say they\u2019ve lost their whole life savings.\u201d<\/p>\n
Tara Siegel Bernard contributed reporting.<\/p>\n