Some GameStop investors had one goal: to pay off debt

Den Kovacs, a 25-year-old IT professional living in Detroit, moved $ 1,000 of his savings and $ 200 that he had set aside to pay his student loan to his Robinhood account – all for the sake of a slice of GameStop. mania. On January 25, he sold his other shares to buy four shares of GameStop for $ 80. After selling four shares for $ 212 on January 26, he bought six more shares for $ 292, according to the trading notes provided.

His ultimate goal: to make enough money to pay off his $ 7,000 credit card debt.

Mr. Kovacs and many other individual investors have been following the frenzy on Reddit, Discord and other platforms. Friday, Mr. Kovacs his remaining seven shares for $ 352 and said he intends to use the profits – nearly $ 2,500, according to trading receipts – to pay off some of his credit card debt.

“I want to put myself in a position where I’m not so in debt,” he said. “It hurts my credit, and I want to be able to go elsewhere. So I want to pay off debt with what I gained from it. ”

As a forum, WallStreetBets typically mocks those who sell because many want to use the power of the group to continue the rally. But when it comes to paying off debt and achieving other savings goals, some users have changed their voices.

A Redditor posted a screenshot of what he said was his final student loan payment: $ 23,504.45 made from GameStop transactions.

“Never thought I would have paid this off so quickly,” said the user.

For some traders who plan to use their windfalls to clear out their student debt and pay off other obligations, it seems worth the gamble.

Amina Spahic, a 28-year-old communications specialist in Florida, originally bought for $ 38 a share two weeks ago. She’s already used some of her GameStop winnings to pay off debt and put the rest back into GameStop. She had already taken her steps earlier this week and said she has no plans to sell for now.

“I knew there was growth and potential,” she said. “I told everyone I knew, ‘I see this on Reddit. Do this.'”

According to Experian analysis, the average credit card debt of millennials in the third quarter of 2020 reached $ 4,322.

According to data analyzed by Mark Kantrowitz, author of “How to Appeal for More College Financial Aid,” more than 22 million borrowers with direct federal student loans interrupted their payments during the pandemic.

Some traders are starting to envision the earnings for money milestones that are out of reach.

Anthony Eleftheriou, an 18-year-old university student living with his parents in London, only started investing a month ago. He bought 25 shares of GameStop for $ 50 on January 22, and said he plans to hold for now, perhaps even using his profits to pay for college tuition.

“I wanted something rich a little quick, but now it’s become more of a long-term thing,” he said.

Joe Ballent, a 32-year-old physician assistant living in Cheyenne, Wyo. Works, said he prioritizes a number of other goals over his student loan with his GameStop earnings: First, pay for his upcoming wedding, and then save up to buy a house. Both seemed out of reach for the GameStop rally, he said.

“I have the feeling that there are many people who have never made progress. I included six debt figures [for graduate school] and had two jobs before going to school, but now I can’t afford a house? “

Mr. Ballent started putting more money into the market last year, first with RobinHood and then with accounts at Vanguard and Schwab. Now he has invested more than $ 10,000 in GameStop, according to the trading receipts provided. He is slowly selling stock, using some of his earnings to pay for the wedding and help a loved one’s medical expenses. Once he is completely sold, he wants to start his house hunt.

“I’m sure I’m just a small fish compared to some of these people,” he said. “But it’s important to me, and I still want to see where it’s going.”

Following RobinHood’s decision to join other brokers in restricting trades on fast-rising stocks, Miss Spahic said she plans to eventually close her positions and remove the app. She is still following the conversation on Reddit to determine which brokerage she will choose as a replacement.

“I follow closely what they all say,” she said. “I’m waiting to see who comes out on top and says they’re for the people.”

Meanwhile, Mr. Kovacs and others set their eyes on WallStreetBets.

“I think people recognize there is an opportunity here,” he said. “You see these gains and look at what happened earlier this week and you say, ‘Is everyone collectively right or is everyone collectively wrong?’ Just like me.”

—Marco Quiroz-Gutierrez contributed to this article.

Write to Julia Carpenter at [email protected]