Sheelah Kolhatkar, 10 May 2021
Early on the morning of January 19th, Cody Herdman woke to the vibration of his smartphone alarm under his pillow. He immediately checked the finance app Robinhood for the trading price of a company called GameStop. Herdman, who is nineteen, is a freshman computer-science major at Dakota State University, where until recently he played center for the Dakota State Trojans football team, and he had been investing in the stock market for a month.
Robinhood, which offers zero-commission trading in stocks and cryptocurrencies, pitches itself as an enlightened version of Wall Street; its stated mission is to “democratize finance for all.” Herdman’s friend Chase Bradshaw had introduced him to trading on the app, which now consumed much of the time that he used to spend playing video games.
With a thousand dollars that his father had given him, Herdman had invested in a handful of securities, buying 11.5 shares of BioCryst Pharmaceuticals, which makes specialized medicines for rare diseases; five shares of Virgin Galactic, the spaceflight company founded by Richard Branson; six shares of Corsair, a gaming-equipment manufacturer; and five shares of Nordic American Tankers, an international oil-tanker operator; as well as 0.007 of a bitcoin. (Robinhood allows the purchase of fractional shares.) He felt a surge of excitement every time he saw a green number indicating that one of those stocks had gone up in value. All Herdman’s previous investments had been based on research into how global events might affect the fortunes of the various companies, but he had also been contemplating buying shares in GameStop, a struggling video-game retailer, after reading posts hyping the stock on an investing forum on Reddit called WallStreetBets. As the stock’s price crept up, from around fourteen dollars a share in mid-December to almost forty a month later, he felt annoyed for not having acted sooner.
That morning, as soon as the stock market opened, Herdman sold nearly everything in his Robinhood account, leaving him with around twelve hundred dollars in cash. Grabbing a clean T-shirt from a plastic bin under his bed, he dressed and rushed to his history class. As his professor delivered a lecture on Coney Island in the eighteen-hundreds, Herdman tracked the market on his phone from a seat in the back of the room. In his dorm after class, he bought shares of GameStop, whose ticker symbol is GME, in two bursts—first 13.77 shares, then sixteen—using all of the cash in his account. As he ate a microwaved pepperoni Hot Pocket, he watched the numbers on his screen. Within forty minutes, GameStop had jumped two dollars. Herdman decided to sell his only remaining non-GameStop holding—a clean-energy stock he’d expected to do well under the Biden Administration—and used the proceeds to buy 6.3 more shares of GME. “I was, like, screw it,” he told me recently. “I’m going all in.”