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{"id":5649,"date":"2022-05-12T15:17:32","date_gmt":"2022-05-12T15:17:32","guid":{"rendered":"https:\/\/scienceandnerds.com\/2022\/05\/12\/what-happens-to-the-foot-soldiers-of-the-meme-trading-revolution\/"},"modified":"2022-05-12T15:17:33","modified_gmt":"2022-05-12T15:17:33","slug":"what-happens-to-the-foot-soldiers-of-the-meme-trading-revolution","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2022\/05\/12\/what-happens-to-the-foot-soldiers-of-the-meme-trading-revolution\/","title":{"rendered":"What happens to the foot soldiers of the meme trading revolution?"},"content":{"rendered":"

Source: https:\/\/www.theverge.com\/2022\/5\/11\/23067404\/meme-stocks-gamestop-crypto-sell<\/a>
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Fintech is in its flop era, and it would be funny, except that it\u2019s dragging real people down with it. <\/p>\n

It\u2019s true that stocks are down generally \u2014 the S&P 500 has fallen 10 percent in the last 30 days, the Nasdaq is down 14 percent, and the Dow Jones Industrial Average dropped 6.5 percent. But fintech is, by comparison, down bad. <\/em><\/p>\n

Coinbase dropped almost two-thirds in the last 30 days. Block, the Jack Dorsey-led company formerly known as Square, fell by 40 percent. PayPal shares dropped by a third. Robinhood has fallen less, shaving off more than a quarter of its value.<\/p>\n

The meme stocks are down bad,<\/a> too. GameStop fell more than 40 percent in the last month. AMC also lost more than 40 percent of its value. Bed, Bath and Beyond is worth about half as much as it was a month ago. Bitcoin\u2019s and Ethereum\u2019s prices tumbled by a little more than a quarter in the last month. They may fall further<\/a>.<\/p>\n

There are certainly institutional investors in all of these things, but the meme stocks were where the retail investors tended to congregate. Remember them? A small army of people <\/a>got bored during the pandemic and started day trading. There\u2019s even a documentary coming out on May 15th on MSNBC, Diamond Hands: The Legend of WallStreetBets<\/em>. (It will start streaming on Peacock on May 16th.) It\u2019s timely, though perhaps not in the way its makers intended.<\/p>\n

The narrative around Gamestonk, if you recall, was that it was a populist uprising against Wall Street. I thought that narrative was bullshit at the time and said so<\/a>, but narratives are powerful. And one thing this documentary makes absolutely clear is that the narrative mattered most to the people who understood the least about the financial markets.<\/p>\n

These investors yoloed into the market during the pandemic, often specifically using upstart service Robinhood. \u201cNothing against Charles Schwab, or any of the other ones, but they just looked like my father should be there, not me,\u201d says Chris Garcia in the documentary. <\/p>\n

Not all of these users were unsophisticated. Alvan Chow, u\/JeffAmazon on Reddit, tells the documentary crew that his game is asymmetric betting: using a small amount of capital to make large returns. He calls the GameStonk play the October before it happened<\/a>. (In the documentary, this post is charmingly read by his brother because he finds his own language \u201ccringey.\u201d) He buys into GameStop at $6 to $8 a share, spending $30,000. <\/p>\n

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