GameStop investors who bet big and lose big

Salvador Vergara was so excited about GameStop Corp. in late January that he took out a personal loan of $ 20,000 and used it to buy stocks. Then the boisterous stocks plummeted nearly 80%.

GameStop’s volatile journey is affecting the portfolios of individual investors like Vergara, who bought the shares in a frenzy fueled by social media. These casual traders say GameStop was their “YOLO” or “you only live once” trade. They bought around its peak in late January, betting it would continue its astronomical rise. While some cashed in before it crashed, others who held onto their stocks are in the red.

Vergara, a 25-year-old security guard from Virginia, started investing four years ago after deciding that he wanted to retire young. To save money, he drives a 1998 Honda Civic, eats a lot of rice, and lives with his father. He hid his savings primarily in diversified index funds, which are now valued at about $ 50,000. Then Vergara, a longtime reader of the WallStreetBets page on Reddit, saw others post about the GameStop stock purchase and the colossal rise in shares.

He didn’t want to touch his index fund investments, so he got a personal loan with an interest rate of 11.19% from a credit union and used it to finance most of his purchase of GameStop. He bought shares at $ 234 each.

Shares of GameStop started the year around $ 19, surged to nearly $ 350 (and nearly hit $ 500 in intraday trading) in late January, and then began to return to earth. Shares closed at $ 52.40 on Friday, 85% below the high close.


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