As a result the investor said his initial investment has grown to almost $2 million.
In a video shared with Newsweek, the user showed a screen recording of his Robinhood trading portfolio taken back when Dogecoin was worth $0.05 in February. He concluded the video with: “Clearly the volatility is very high, so I am not a financial advisor, this is not financial advice—purely entertainment.”
He had purchased just over five million of the tokens. Screenshots seen by Newsweek showed the total value had increased to $1,881,533 by Friday morning ET.
The investor first shared the news he had become a millionaire in a Reddit post on Thursday. It gained nearly 70,000 upvotes on the website.
He told Newsweek: “I feel absolutely incredible right now. I grew up very poor, I don’t come from money so I’ve worked dead-end jobs throughout my life to make ends meet.
“I currently have a regular 9 to 5 job right now and I basically live paycheck to paycheck. I also own a super beat-up 2004 Toyota Corolla that has over 200K miles on it and completely falling apart.”
He first started investing in the stock market years ago, incrementally putting bits of his paycheck into shares he thought were undervalued. He also said the rallies on GameStop shares earlier this year following investment by Reddit users influenced his outlook.
The GameStop frenzy on Wall Street has investors, and much of the internet, enraptured — not unlike a good horror movie. Everyone knows doom is just around the corner for some key players; a lucky few will emerge stronger; and the monster might be subdued but will ultimately come back for a sequel.
The popular Reddit page WallStreetBets is fond of targeting short-sellers. If you’ve ever played craps, these are the guys betting against the table, and their tactics, while often lucrative, have burnished their reputation as bloodsuckers and other, unpublishable, names. (More on that later.)
It’s not hard to understand why someone would short GameStop, however. The company is expected to lose money this year and next. Sales growth is sluggish because gamers no longer need to go to the mall to buy games or consoles. That said, some investors have argued that GameStop was seriously undervalued, especially when video games have become staples of the stay-at-home pandemic era.
The GameStop stock surge began for a legitimate reason: The company announced on January 11 it had added three new directors to its board, including Chewy co-founder Ryan Cohen. Investors liked that Cohen brought digital experience to the table, something the largely brick-and-mortar GameStop desperately needs, as video games go digital and malls continue their unending slump into irrelevance.
GameStop’s stock rose a little less than 13% that day. But this wasn’t a normal, momentary stock surge. Two days later, it rose 57%. Then 27%. The next week, it surged 10% twice and 51% another day. This week, it rose another 18% then 93% and more than doubled today.
The reason is two-fold, both of which are far removed from anything related to the company’s fundamental strength: Investors following the Reddit group bought a ton of GameStop options, and short-sellers had to buy shares to cover their losing bids.
On Wednesday, while all three major stock indexes tumbled, GameStop finished up a mind-boggling 134%.
For perspective: One year ago, a single share cost about $4. It’s now $200.
Options are bets investors place on a stock, allowing them to buy (a “call” option) or sell (a “put” option) at a particular price. That allows people to wager on whether a stock will rise or fall.
Investors can place relatively inexpensive options bets and sell those options as they rise in value when the stock price gets closer to their wager. Although buying and selling options isn’t the same as buying and selling stocks, big options volumes can drive a stock up or down, typically because options traders buy or sell the stock itself as a hedge.
In the case of GameStop and other stocks targeted by WSB, traders keep buying options, forcing the investors selling those options to hedge their bets by buying up GameStop stock.
WallStreetBets, which has more than 2 million followers, is littered with posts cheering the stock gains and no small amount of righteous indignation.
“What I think is happening is that you guys are making such an impact that these fat cats are worried that they have to get up and put in work to earn a living,” a moderator in the group posted this week.”That fuzzy sensation you are feeling is called RESPECT and it is well earned. Wall Street no longer dismisses your presence anymore.”
Elon Musk appeared to join the pile-on Tuesday with a single-word tweet — “Gamestonk!!” — that linked to WallStreetBets. Tech investor Chamath Palihapitiya dipped his toe in the frenzy, buying call options on Tuesday but closing his position Wednesday, he told CNBC. Palihapitiya said he would donate his profits to charity and defended the retail-investing phenomenon playing out on Reddit.
“Instead of having ‘idea dinners’ or quiet whispered conversations amongst hedge funds in the Hamptons, these kids have the courage to do it transparently in a forum,” he said. “What it proves is this retail [investor] phenomenon is here to stay.”
The GameStop saga is a battle of new school vs. old school, amateur vs. professional, rebels vs. the establishment. At the moment, the kids are winning. But, like all bubbles, this one’s going to burst at some point.
Reddit has acquired Dubsmash, the lipsyncing video app which launched in 2014 and was largely supplanted when TikTok showed up.
Announced via Reddit’s blog on Sunday, the annexing of Dubsmash’s 12-person team to Reddit’s 700-strong horde is the popular website’s first major acquisition in its 15-year history.
While the financial terms of the agreement haven’t been disclosed, Dubsmash will be keeping its own platform and separate branding. Dubsmash’s Android and Apple apps will continue to operate as normal, with its video creation tools simply integrated into Reddit’s infrastructure.
Reddit currently allows users to upload and livestream videos, however its editing capabilities are somewhat lacklustre — a problem this acquisition hopes to address.
“The transition to video will be bigger than the transition to mobile,” Reddit co-founder and CEO Steve Huffman said, speaking via the Wall Street Journal. Which sounds fake, but okay. Pivots to video historically haven’t worked out well, but perhaps the distinction between editorial and user-created content will yield better results.
Dubsmash went through a slow decline in the wake of its 2015 popularity boom, before revamping itself in 2017 to stage an unlikely comeback. While still not as successful as TikTok, the short-form video app established a significant audience by focusing on the one demographic still using it — Black teenagers in the U.S.
As such, both Reddit and Dubsmash’s acquisition announcements heavily emphasised the diverse, underrepresented creators who use the app. According to Reddit, a quarter of Black teens in the U.S. use Dubsmash, while 70 percent of users are women or girls.
“By joining forces with Reddit, we expand our ability to serve the creators that represent the lifeblood of Dubsmash, helping them connect, share, and deepen their impact on culture,” wrote Dubsmash co-founders Suchit Dash, Jonas Drüppel and Tim Specht. The trio further reaffirmed their goal to “[create] a safe and welcoming platform for underrepresented communities.”
“Both Reddit and Dubsmash share a deep rooted respect for how communities come together,” said Huffman. “Dubsmash elevates under-represented creators, while Reddit fosters a sense of community and belonging across thousands of different topics and passions.”
Current CEO Steve Huffman posted a letter to Reddit employees on June 1 outlining support for the Black Lives Matter movement, but it did not include specific actions the company was taking. The logo will remain black for eight days, in symbolism of the number of minutes Minneapolis police office Derek Chauvin held his knee on George Floyd’s neck.
Today, Reddit co-founder Alexis Ohanian announced his resignation from his role on the board of directors and asked to be replaced with a black candidate. He has also donated one million dollars to Colin Kaepernick’s Know Your Rights campaign, and said he will funnel all future gains on his Reddit stock to benefit the black community.
Some internet users expressed their frustrations on Twitter where one commented, “Me trying to enjoy some music but noticing the Spotify logo is slightly crooked when opening the app.” Another user chimed in with the question, “The new @Spotify logo color made me realize it’s horrifyingly unsymmetrical. Why? Why would you do this? WHY?”
Many Spotify users have reached out to the company, urging it to fix the logo. Brown’s colleague explained that the tilted lines prevent the logo from looking like a Wi-Fi icon. Another colleague added that if the lines were tilted more, the logo would look like an RSS symbol.
In a 2013 interview by Gizmodo with Spotify employees Christian Wilsson and Andreas Holmström, the duo explained that the tilted logo offered “more personality” and looked “more organic.”