$20,000 Bet on GameStop 💎

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$20,000 Bet on GameStop

In our next story, we take a look at an article reported by The Wall Street Journal of an investor who bet on GameStop and got carried away with his ‘diamond hands.’

Salvador Vergara is a 25-year-old security guard from Virginia. About four years ago, Vergara decided he wanted to start investing to save for retirement. Vergara invests in relatively low-risk index funds, drives a 1998 Honda Civic and eats rice for dinner — he seems like a financially savvy individual. But Vergara got caught up in the GameStop mania, taking out a $20,000 loan to buy shares.

After browsing the infamous subreddit WallStreetBets and seeing young traders amass thousands of dollars within minutes, the feeling of missing out (FOMO) hit Vergara like a train, and he decided he could not miss out on the fun. Vergara bought shares of GameStop at $234 each.

He bought shares using a $20,000 loan from his credit union, his interest rate. — 11.19%.

In January, GameStop’s stock flew to the moon, going from $19 to nearly $350 per share, more than a 1500% increase in a matter of weeks. Vergara said “I thought it could go up to $1,000. I really believed in that hype.”

As Vergara held his shares believing GameStop’s stock could fly to $1000, he saw the stock plunge, closing at $52.40 last Friday. Vergara’s investment is now down over 70% — he’s down more than $14,000.

Despite Vergara’s diamond hands putting a strain on his portfolio, he still plans on holding his shares as he believes in the company’s future.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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