From Reddit to Wall Street: Whitman students capitalize off stock frenzy


Christina Xiong

Whitman students took advantage of the February stock market frenzy.

By Kendall Headley

“GameStop, GameStop, GameStop. It was everywhere,” senior Paul Lukas said, looking back on mid-January when the increasingly irrelevant video game retailer’s stock value unexpectedly boomed, dominating Lukas’ Reddit feed. 

For the past few years, GameStop’s (GME) stock has been the most shorted stock on the market. Shorting a stock essentially refers to when Wall Street hedge funds bet against the success of the company, and, by extension, its market valuation 

In an unexpected — and frankly, unprecedented — move, thousands of Reddit users from the r/WallStreetBets subreddit, a page on the social media site, Reddit, devoted to discussing stock trading, decided to buy up shares en masse. A post on the page birthed the idea, and the value started increasing on January 11. Traders drove up GameStop’s stock prices to over 1,700% of their original value by January 27. 

“It’s a complicated track,” said personal finance teacher Wayne Jacobsen. “But to be put simply: it’s a power struggle for activists on Reddit who resent the power of the big traders who were shorting GameStop. By pushing the price up, the activists caused the short traders to lose billions of dollars.”

Senior Jordan Maggin, a frequenter of r/WSB, introduced the page to Lukas over the summer. When talk of GameStop bombarded the page, it caught their attention, they said. They had never seen a share price skyrocket as quickly GME.

The pair soon recognized the stock’s potential success, leading Lukas to decide to place a “decent chunk” of his money into a GME investment.

“I saw that it could actually be promising, and I didn’t have that much to lose,” Lukas said. “It was almost building up to the point that it became a movement, and I was curious as to how it would play out, so I went for it.”

Maggin, contrastingly, decided against a GME venture. By the time he had transferred enough money into his account to make a purchase, the stock price had already ballooned past a safe investment margin. He wanted more leverage, so instead he opted to purchase shares in Blackberry (BB), another target for the members of r/WallStreetBets. At the time, it was cheaper than GME and also highly shorted. But in the end, BB’s price didn’t rise as heavily as GME. With underperforming companies, the stock price doesn’t reflect the actual revenue, meaning businesses like Blackberry wound up just taking a larger loss. Maggin, however, isn’t upset about the money that he personally lost, he said.

“What this whole thing was was a battle between the people and the institution, and that’s what was so appealing about it,” Maggin said. “So when I lost money on Blackberry I really couldn’t care less, because I think it was sort of like a political statement.”

Driving the GME stock price up was, for some internet investors, more of a revenge plot against the very Wall Street hedge funds who instigated the subprime mortgage crisis and subsequent market collapse of 2008.

As the prices drastically increased on GME’s stock, the hedge funds who had shorted it lost billions, but small time investors like Lukas and Maggin had little sympathy.

“They had more than enough chances to cut their losses and say we’re out of it, but the fact that they held and they decided to stick with the short squeezes — it was dead obvious that they just wanted to win and the little guys to lose,” Lukas said. “That’s where I drew the line and said ‘Alright, that’s it. Now I’m against you guys.’”

Though this was a novel experience for Maggin and Lukas, the two are not new to the stock scene. 

Maggin had become interested in the market at a young age when his grandfather gifted him old U.S. saving bonds. His curiosity with the bonds then evolved into a general fascination about the stock market, which has stuck with him through high school, he said. Lukas’ involvement was sparked by the personal finance and international business classes he took in his sophomore year. He then expanded his understanding of finance through various summer programs and extracurricular courses, he said. Maggin and Lukas are currently co-presidents of the Whitman investing club, and avid stock-traders. 

“We started a club called the Whitman High School Investors Club to meet and talk about investing and trading strategies and stock market happenings,” Lukas said. “If people want to know more about the market and be notified when things like the GME stock happen in the future, they should join the club.”

Throughout the GME trading ordeal, Lukas said he began to realize there was more to the stock market than financial complexity and appeal of trading. He appreciates having been a part of a movement that will be cemented in history, he said.

“I really enjoyed the ride, and making the money was cool,” Lukas said. “But being on this train of something that’s been on every single news channel prominently for the past few weeks and will most likely change how the stock market is viewed in the future, that was the best part.”