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Redditor at R/wallstreetbets got $76K loans to trade meme shares

  • A Reddit user got $76,672 in loans to trade meme shares and lost almost all of it.
  • Aaron says he felt addicted to trading after using the subreddit, styled r/wallstreetbets.
  • Now you are left with monthly payments that eat up more than half of your income.

A Reddit group member who fueled Gamestop’s stock market mayhem got $75,000 in loans and says he was addicted to meme stock trading, even losing $6,000 lent him by his girlfriend.

Aaron, a software engineer from Munich, obtained tens of thousands of dollars in loans to trade stocks. He said he was prompted by conversations on the Wall Street Bets subreddit, styled r/wallstreetbets and also known as WSB, which pushed him to invest sums he couldn’t afford for fear of missing out on big profits.

Aaron, 29, uses a pseudonym because he doesn’t want his family to find out about his losses.

“It was like an addiction because you have this community and they always post,” he told Insider.

“And then you see, ‘Oh, there’s the next big thing,’ and then you’re like, ‘I’ve got to raise money and I’ve got to invest it or I’m going to miss out on this great opportunity.’”

Despite earning $4,000 early on, Aaron quickly saw his finances fall into a black hole.

He took out five loans totaling €71,000 ($76,672) between December 2020 and September 2021 to help him invest in meme stocks, low-value stocks that gain publicity via social media, increasing their value, like Bed Bath & Beyond. The largest single loan from him was 20,000 euros, or about $21,488.

Insider verified this information with documents shared by Aaron.

I would also bet thousands at a time on companies like Tesla and trading options, which allow traders to boost their investment through leverage, putting in more than they can afford.

WallStreetBets and meme actions

Aaron is one of millions of Wall Street Bets members. The subreddit rose to fame in 2021 when it made millionaires of some retailers and bankrupted others, often by trading meme stocks in “short squeezes.”

Aaron was drawn to the humorous atmosphere and cartoonish avatar on the forum.

WSB traders use the term “tendies” to refer to the financial gains made from the stock market.

A screenshot of the r/wallstreetbets home page.

Reddit

“I’ve always been interested in the stock market,” Aaron told Insider. “Then I saw the cool avatar, like the cool profile picture. I thought, ‘Wow, that should be my thing.’”

“It wasn’t too serious,” he added. “It was fun, a fun community, and I was like, ‘Yeah, I want to be in this community.’”

Aaron said the WSB posts were the catalyst for their exchanges. He would read a discussion about a particular stock, borrow thousands of dollars, and accumulate the money in leveraged bets. He feels he was pushed into increasingly risky trades, though he admitted he didn’t do much research himself before investing money.

But last year was terrible for the stock market. Bed Bath & Beyond, Aaron’s meme stock of choice, has lost 88% of its value since January 2021. It would be more if it weren’t for another shortage-driven rally last week.

‘I was ashamed’

When the loan losses mounted, he convinced his girlfriend to let him invest his money in August of last year.

He initially suggested putting $100 into a brokerage account that Aaron had access to.

“I said: ‘What am I going to do with 100 euros?’ You can’t make a lot of money out of it. I thought, ‘I’ll invest your money risk-free,’” she told Insider. He eventually convinced his girlfriend to deposit $10,000 into her account. He admitted that he misled her about the risk level of the investments.

Two months after accessing his girlfriend’s money, he lost $6,000 gambling on meme stocks. She found out about it by looking at her brokerage account before Aaron could break the news to her, she said.

“I was embarrassed, and I’m still embarrassed,” he said. “I could have gone to the casino and played a slot machine and it would be the same.”

The Financial Industry Regulatory Authority (FINRA), a self-regulatory organization that oversees broker behavior, cautions that all investments carry risk and suggests that using strategies such as asset allocation and diversification can reduce investing risk. .

“The bottom line is that all investments carry some degree of risk,” FINRA said on its website. “By better understanding the nature of risk and taking steps to manage those risks, you put yourself in a better position to achieve your financial goals.”

Losing the money didn’t end Aaron’s relationship, and he said he even went on vacation to Portugal in December with his girlfriend, a trip she paid for. “She really is the dream girl,” Aaron said, adding that she gets mad when the subject of her swapping comes up.

But it is causing other tensions. Aaron said that he can only go out to eat or drink when his girlfriend pays. He would like to propose to her, but he said that he can’t afford an engagement ring.

He estimates he pays $1,500 in debt payments each month, a sizable chunk of his monthly income of about $2,800 after taxes, which Insider verified with documents. With an estimate of between $50,000 and $60,000 to pay, he says he will probably pay off his debt until 2028.

“So I have to pay rent, I have to pay for food. I just live to pay for this,” Aaron said.

In an email to Insider, a Reddit spokesperson directed Insider to the WSB site rules, which include warnings against market manipulation as well as “scams.”

The Reddit spokesperson said: “Users should interact with communities at their own discretion, follow Reddit’s site-wide policies and community rules.”

Aaron told Insider that he had barely gambled before entering the stock market, which he sees as gambling.

“If there were no Wall Street bets, it would never happen,” he said. It is not currently trading, but despite its losses, he said it will likely be back in business at some point.

“I’ll check the subreddit and probably put my money back on it,” he said. He doesn’t know how much, “but I’ll definitely do it because it’s fun.”

Have a story about using the WSB subreddit in conjunction with investing? Email rhogg@insider.com

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