Poker player Daniel Moravec may have helped GameStop’s stock price rise late Friday due to a viral post he made on the subreddit forum WallStreetBets. The Minnesota native, who spoke with CardsChat News, discovered a trick to help heavily bankrolled investors buy restricted stocks from Robinhood and other trading apps.
Although the company is headed toward bankruptcy due to its failing stores nationwide, GameStop’s stock (GME) price has risen to unthinkable heights over the past week due to a push from Reddit investors like Moravec, a passionate poker player who now resides in Las Vegas, and who posts on the WallStreetBets forum.
The video game retailer’s stock has gone from under $20 per share a few weeks ago to a closing price of $325 on Friday. Earlier in the day, it surpassed $400. Many investors made a killing this past week, and believe this is only the beginning. Some investors on Reddit and Twitter anticipate an eventual $1,000 mark.
GameStop Stock Becomes Tough to Buy
There’s one issue that could stop GameStop stock from continuing to grow, along with AMC Theaters stock (AMC) and a few other struggling companies that WallStreetBets users are pushing. And that is that Robinhood, and other similar trading apps, are attempting to prevent the purchase of additional shares.
On Thursday morning, Robinhood, WeBull, and similar apps that have millions of customers, put a block on certain stocks such as GME and AMC. This caused an uproar among investors who saw an opportunity to make a buck. After some brushback from consumers and a class-action lawsuit filed against it, Robinhood began allowing GME and AMC purchases, but with restrictions. Moravec, who final tabled a 2019 WSOP No-Limit Hold’em/Pot-Limit Omaha mixed event, found a way around it.
The high-stakes investor then informed the posters on WallStreetBets in a post that went viral. His solution to the brokerage restrictions, however, only works for those with at least a $30,000 bankroll. In the post, he explains a four-step process he discovered to get around the restrictions.
Here’s a trick that will work.
- Go to Feb 5. option
- Scroll all the way down the call list
- Buy GME call option with the cheapest +x.xx%
- Immediately exercise
Moravec, whose Reddit screen name is “adioking,” is a successful investor who began trading stocks nearly two decades ago.
“I’ve been trading since 2005 when I bought Apple stock (AAPL) at around $2 per share,” Moravec told CardsChat News.
He still holds onto that investment, which is now worth over $130 per share. The poker fan runs a stock investment group called the “Bitcoin Mavericks,” which you can learn more about via his Reddit profile.
Robinhood is one of the most popular trading apps available, especially among younger investors. When the third-party app prevented customers from buying new shares of GME, AMC, and other volatile stocks popularized by the WallStreetBets subreddit, investors became angry and lashed out on social media.
“I had bought some options on GameStop on Robinhood, which I sold due to the potential of the manipulation affecting me. Then on Thursday morning when I tried to buy additional shares, they weren’t allowing me to buy,” Moravec said.
Moravec and a friend bought up over 6,000 shares of AMC when the stock was at $6 per share (it closed on Friday at over $13 per share).
When Robinhood shut him out of buying more into GME, he found a way to beat the system. Moravec’s post on Reddit has more than 75,000 upvotes and 4,000 comments. Many fellow investors found the advice to be quite helpful. One poster even said he took Moravec’s advice and was able to purchase 1,000 shares.
In the hours prior to the post, GME dipped well below $300. Immediately after, it rebounded to close at $325, perhaps due to Reddit users figuring out from the post how to avoid the Robinhood restrictions.
Saw it Coming
The AMC and GameStop stock price spikes have been the talk of Twitter, mainstream media, and just about any investment podcast or YouTube channel over the past week. The price fluctuations have been largely due to WallStreetBets posters, all of whom bought stock in those companies as a way of sticking it to the billionaire hedge funds that now must payback on their expiring short sales. Moravec wasn’t surprised to see AMC and GME rise.
“I’ve been watching the GameStop stock closely since September,” he said. “I was watching it because I noticed the amount of short interest. There were more short shares than there were total shares for sale.”
Moravec said he bought “thousands of shares in options at $6.50 per share,” in October, which he then sold in December for $13.50 after listening to a bad earnings call. He said he noticed WallStreetBets was taking more interest in GME after that, so he bought back in a week later, paying about $35 per share.
GameStop, a video game retail giant that has lost money for two straight years traded at just under $20 on Jan. 12. One day later, it was up over $30 due to WallStreetBets posters buying up the stock. From there, it continued to its steep climb to well over $300 (currently at $325).
Next week is going to be a wild one for those invested in AMC Theaters and GameStop stock. Many social media pundits expect both stocks to continue rising. But, the mainstream media “experts” suggest otherwise. One thing is certain, however; it’s going to be a bumpy ride.