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 emergency savings and $ 200 he set aside for his student loan payment into his Robinhood account. . 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 another six shares at $ 292, according to the trading evidence.

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

Mr. Kovacs and many other individual investors have followed the madness on Reddit, Discord and other platforms. On Friday, Mr. Kovacs sold its remaining seven shares at $ 352, saying it plans to use the profits – nearly $ 2,500, according to receipts – to pay off part of its credit card debt.

“I want to put myself in a position where I’m not so in debt,” he said. ‘It hurts my credit score, and I want to be able to move somewhere else. So I want to pay off debt with everything I earn from this. ”

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

One 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 for it so soon,” the user posted.

For some traders who plan to use their windfall to get rid of their student debt and pay off other obligations, it’s worth the risk.

Amina Spahic, a 28-year-old communications specialist in Florida, originally bought two weeks ago for $ 38 a share. She has already used some of her GameStop profits to pay off debt and put the rest back in GameStop. After making her move earlier this week, she said she has no plans to sell at the moment.

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

According to Analian, the average credit card debt of Millennials rose to $ 4,322 in the third quarter of 2020..

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

Some traders have anticipated earnings for money milestones that remain 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 Jan. 22, and said he plans to hold on for a while, maybe even use his profits to pay tuition.

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

Joe Ballent, a 32-year-old medical assistant working in Cheyenne, Wyo. buy a house. Both seemed out of reach before the GameStop protest, he said.

‘I feel like there are a lot of people who have never been able to succeed. I assumed six debt figures [for graduate school] and before school worked two jobs but now I can not afford a house? ‘

Ballent started putting more money into the market last year, first at RobinHood and then at accounts at Vanguard and Schwab. Now he has invested more than $ 10,000 in GameStop, according to the receipts. He slowly sells shares and uses his profits to pay for the wedding and to help medical expenses of a loved one. Once he has completely sold out, he wants to start his house hunt.

“I’m probably 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 restrict trading in rapidly rising stocks at other brokers, Ms. 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 keep a close eye on what everyone is saying,” she said. “I’m waiting to see who comes out on top and says they’re for the people.”

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

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

—Marco Quiroz-Gutierrez contributed to this article.

Write to Julia Carpenter by [email protected]