Hunter Kahn ’23 was on a family road trip when he received the news: He scored $30,000 off GameStop stock.
“Waking up in the morning and seeing my account was up like tens of thousands of dollars — I was freaking out,” Kahn said.
Kahn wasn’t the only young investor to cash out that day. Big investment wins are often thought to only exist for those on Wall Street, but small independent investors had major success last week after collectively investing in GameStop, the video game retailer.
Communicating on the reddit forum r/WallStreetBets, they worked together to inflate its stock value and squeeze its short sellers — wealthy hedge funds who predicted the value would fall.
Kahn, a mechanical engineering major who started investing his senior year of high school with the help of Reddit and the app Robinhood, is one of many amateur investors who beat the short sellers at their own game.
After his windfall, Kahn donated about $2,000 worth of GameStop merchandise, including six Switches and compatible games, to Children’s Minnesota Hospital in his hometown of Minneapolis.
“I know a lot of other people in my community who have connections to Children’s,” Kahn said, “so it’s definitely a very special hospital to my community.”
Kahn posted an Instagram photo with the donated merchandise on Jan. 30. It garnered almost 35,000 likes by Feb. 7 and propelled him to national news headlines. NBC News Now interviewed him live, Ryan Seacrest interviewed him on internet radio and a Fox News headline called him the “Real Robin Hood.”
He said he’s most excited for a CNBC Fast Money panel on Feb. 16, where he will be asked more in-depth trading questions.
“I just kind of want to prove we’re just regular people, and we’re the good guys in this,” Kahn said.
Playing hedge funds in their own trading practices and games was part of the motivation behind small investors’ investment in GameStop, and it triggered new conversations about the role of different entities in the stock market.
Prof. Murillo Campello, finance, saw the effects of the GameStop collaboration firsthand, when his son earned $1,000 off the company’s stock. But he said he didn’t predict the magnitude of the frenzy, and said he didn’t think its motivation was completely rational.
“I don’t think the right way to correct [hedge funds] is to have people with no idea what they’re doing, with little knowledge of markets, bringing down markets just because it’s fun,” Campello said.
Some economists have noted that hedge funds, some of which were down $26 billion on Jan. 27, lost retirees’ and other savers’ money, disrupting a smoothly working market at the hands of amateur investors. But, Campello said, leaving the market in the hands of a few powerful investors would also be harmful.
George Sarbinowski ’24, who made a 70 percent return on GameStop stock, didn’t pay too much attention to r/WallStreetBets.
But, he said he took advantage of a good buying opportunity and appreciated the role of the internet to connect a wider audience on a good trade. He ended up with about $300.
As for Kahn, although he’s cashed out on his call options, he hasn’t sold all of his GameStop stock, adding that he thinks the real short squeeze hasn’t happened yet.
“Retail traders can make these crazy moves in the same way that the professionals can,” Kahn said, “and it’s also just showing that it’s kind of a level playing field.”