Reddit; iStock; Rachel Mendelson/Insider
- A Reddit user took out $76,672 in loans to trade meme stocks and lost nearly all of it.
- Aaron says he felt addicted to trading after using the subreddit, styled as r/wallstreetbets.
- He’s now left with monthly repayments that eat up more than half his income.
A member of the Reddit group that fueled the Gamestop stock chaos took out $75,000 in loans and says he was addicted to trading meme stocks — even losing $6,000 lent to him by his girlfriend.
Aaron, a software engineer from Munich, took out tens of thousands of dollars in loans to trade stocks. He said was driven by chatter on the Wall Street Bets subreddit, styled as r/wallstreetbets and also known as WSB, which pushed him into investing sums he couldn’t afford for fear of missing out on big returns.
Aaron, 29, is using a pseudonym as 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 a next big thing,’ and then you are like, ‘I have to get money and I have to invest it or else I will miss out on this big chance.'”
Despite making $4,000 at the start, Aaron quickly saw his finances fall into a black hole.
He took out five loans for a total of 71,000 euros ($76,672) between December 2020 and September 2021 to help him invest in meme stocks — stocks with low value that gain hype through social media, driving up their value — like Bed Bath & Beyond. His biggest one-off loan was for 20,000 euros, or about $21,488.
Insider verified this information with documents shared by Aaron.
He would also bet thousands at a time on companies like Tesla and trade options, which allow traders to supercharge their investment via leverage, putting in more than they can afford.
WallStreetBets and meme stocks
Aaron is one of millions of members of Wall Street Bets. The subreddit shot to fame in 2021 when it made some retail traders into millionaires while bankrupting others, often through trading meme stocks in “short squeezes.”
Aaron was attracted by the forum’s jokey atmosphere and cartoon avatar.
WSB’s traders use the term “tendies” to refer to financial gains made from the stock market.
A screenshot of the r/wallstreetbets home page.
“I was always interested in the stock market,” Aaron told Insider. “So then I saw the cool avatar, like the cool profile picture. I was like, ‘Wow, that should be my thing.'”
“It was not too serious,” he added. “It was fun, a funny community and I was like, ‘Yeah, I want to be in this community.'”
Aaron said WSB posts were the catalyst to his trades. He would read a discussion around a particular stock, request a loan for thousands of dollars, and pile the money into leveraged bets. He feels he was pushed into increasingly risky trades — though he admitted he didn’t do much research himself before putting money in.
But last year was a dire one 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 not for another short-squeeze driven rally last week.
‘I was ashamed’
When losses from loans piled up, he convinced his girlfriend to let him invest her money in August last year.
She initially suggested putting 100 euros in a brokerage account that Aaron had access to.
“I said, ‘What am I gonna do with 100 euros?’ You cannot get a lot of money off of it. I was like, ‘I will invest your money with no risk,'” he told Insider. He eventually convinced his girlfriend to put $10,000 into her account. He acknowledged he misled her on the level of risk in the investments.
Within two months of accessing his girlfriend’s money, he lost $6,000 of it betting on meme stocks. She found out by viewing her brokerage account before Aaron could break the news to her, he said.
“I was ashamed, and I still am ashamed,” he said. “I could have went to the casino and played a slot machine and it would be the same thing.”
The Financial Industry Regulatory Authority (FINRA), a self-regulatory organization that monitors broker behavior, warns that all investing carries risk and suggests using strategies like asset allocation and diversification can reduce the risk of investing.
“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 meet your financial goals.”
Losing the money didn’t end Aaron’s relationship, and he said he even went on holiday to Portugal in December with his girlfriend — a trip she paid for. “She’s really the dream girl,” Aaron said, adding that she does get angry when the subject of his trading comes up.
But it’s causing other strains. Aaron said he can only go out for food or drinks when his girlfriend pays. He would like to propose to her but said he can’t afford an engagement ring.
He estimates that he pays $1,500 in debt repayments every month — a sizable chunk of his monthly income of around $2,800 after taxes, which Insider verified with documents. With an estimate of between $50,000 and $60,000 left to pay off, he says he’ll probably be paying off his debt through 2028.
“Then I have to pay rent, I have to pay for food. I’m only living to pay this stuff,” Aaron said.
In an email to Insider, a spokesperson for Reddit directed Insider to WSB’s site rules, which include warnings against market manipulation as well as short squeezes or “scams.”
The Reddit spokesperson said: “Users should engage with communities at their own discretion, follow Reddit’s sitewide policies and the community’s rules.”
Aaron told Insider he had barely gambled before getting into the stock market, which he sees as gambling.
“If there was no Wall Street Bets, it wouldn’t ever happen,” he said. He’s not currently trading, but despite his losses, he said he’ll probably get back to trading at some point.
“I will check out the subreddit, and I will probably gamble my money again,” he said. He doesn’t know how much, “but I will definitely do it because it’s fun.”
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