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At this point, we’ve all heard about the GameStop price surge, with everyone from celebrities to politicians chiming in on the massive short squeeze. What makes this stock market price rise unique is that many of the beneficiaries are small-scale investors, one being Tiger Dorriz, an 18 year old from Seattle.
The University of Washington student bought over 400 shares of the beleaguered video game store in September 2020 at $10.85 each due to posts he had seen on the popular investment forum r/wallstreetbets. It cost him just over $4,000 at the time, which he admitted was a large amount to risk as a college student during a pandemic.
His reasoning for the trade?
“The new Xbox & PS5 gaming consoles coming out made me believe that Gamestop’s stock would probably increase leading up to their release[November], and I was right,” Tiger recalls. “On PS5 release day, I was up around $500, and I considered selling.”
Instead of selling, Tiger decided to double down on his investment. He purchased $500 more of Gamestop stock via call option contracts, a riskier form of investment which offers potentially parabolic returns if the stock were to go up. The risk posed is that option contracts have an expiration date, meaning that if the stock doesn’t move soon the purchaser could stand to lose 100% of their investment.
In Tiger’s case, the latter happened. While GameStop continued to move upwards in December, his contracts required a $22 price tag to become redeemable, a number that GameStop didn’t hit in time.
“What hurts the most is that if I had rolled the contracts out just one more month into the end of January I would’ve made at least $500,000,” Tiger lamented.
The good news for Tiger is that he held onto his shares the whole time, watching its value rise from $4,000 to over $150,000, before selling his shares on Thursday & Friday for $110,000.
What does he plan to spend his new-found riches on?
“I’m going to reinvest everything into a down payment for a rental property, and use it towards making content on my TikTok and Youtube pages,” he said. “I’m not a materialistic person that’s going to go waste money on designer clothing, I don’t have anything expensive at home, my goal has always been to live frugally until I can retire at 30 & I feel like I’m well on my way now.”
What advice does Tiger have for other investors?
“Don’t risk a lot of your money on random stocks you see online, honestly,” Tiger said. “I got a bit lucky, but before this play I was up & down, and especially if you’re young that has a severe toll on your mental health. Be smart & operate within your risk tolerance.”
