Bay Area investor bought a dog with his Dogecoin returns. He’s a reminder meme stocks aren’t going away


Earlier this month, investors and media organizations watched as GameStop stock rallied to its highest price point since its unexpected peaks in January — cresting at $302 a share. And they’re watching this week as the stock tumbled once again, bottoming out at $200 on Monday.

The point is, if anybody thought it was a one-time thing when a group of users banned together to drive up GameStop prices more than 1,500% in January, they were mistaken. The cycle has repeated itself, though not always to the same highs, with other stocks, like AMC, while investment fever has bled into crypto currencies and assets, like NFTs.

In retrospect, that event seems only to have popularized the concept of a “meme-stock” (low-cost, high shorted stocks) — while, at the same time, marking the arrival of a new wave of retail investors who base their trades not on business fundamentals but on social media buzz, investor solidarity and the whims of the pop culture zeitgeist.

Shay Kornfeld is among them. Every so often, the public school math teacher living in Walnut Creek, would drop a couple hundred dollars from his paycheck into a “safe” stock, hoping, one day, the investment would pay off. One month it would be Apple, the next Boeing. The returns were usually modest — $4 here, $6 there. “It wasn’t that worthwhile,” he says.

Then earlier this year, he changed course. Driven, in part, by the massive media coverage of meme stocks he and his wife invested a few hundred dollars in some unusual companies. They bought stock in GameStop, the video game retailer, AMC, the movie chain, Nokia and Blackberry. They lost on the last two, but AMC earned them $1,000 and GameStop, a couple hundred, he says.

Still, it wasn’t the massive windfalls that others on social media were talking about. So, he started looking for the next big thing and came across Dogecoin, a cryptocurrency initially created as a joke. With Dogecoin, he could get in on the ground floor. “I could spend $30 and get 10,000 coins,” he says. There was also lots of pop culture chatter about the coin, in particular from billionaire Elon Musk.

“This is going to be the ticket,” Kornfeld thought at the time. It turned out he was right. The bet paid off. A $500 investment turned into more than $30,000 at Dogecoin’s peak in May. The price has since cooled, but he’s still up around $20,000. Early on, he and his wife took out $1,500 to buy a puppy. “I give my wife a hard time about that,” he says. Their $18,000 puppy. Kornfeld wanted to name him Doge, but he ultimately settled for Bullet.

Alan Kornfeld (center) and his father, Shay Kornfeld, play with the family dog, Bullet, on the floor of the family house in Walnut Creek. Shay and his wife cashed out some of their Dogecoin earnings to buy a $1,500 dog at one point, and they like to joke that Bullet is now a $18,000 puppy.

Nina Riggio/Special to The Chronicle

These memestop and crypto markets are highly volatile. Some had bet big on Dogecoin in the days leading up Musk’s appearance on “Saturday Night Live,” only to watch as prices dropped substantially that day. According to an analysis by CNBC, “on average, Reddit stocks’ runs lasted nine trading days from the start to their first big drop during the initial frenzy in January.”

But that hasn’t stopped retail investors from trying to grab their piece of the profits. According to a survey from Charles Schwabb, 15% of current retail investors made their entrance into trading last year. Meanwhile, stock volumes, which shot up dramatically in 2020 are tracking even higher this year. Average daily trading volume this year is 14.7 billion shares, up from 10.9 billion last year and 7 billion in 2019.

For Kornfeld, the trend offered a way to actually see returns on investments — he expects to slowly spend the rest of the money he made on the sorts of things he wouldn’t be able to afford otherwise, concert tickets, a trip with his son, that sort of thing. For others, though, like Contra Costa ride share driver, Victor Kim, investing is political.

“We’re calling it a movement,” Kim says. A few months ago he bought 40 shares of GameStop. He’s not planning on selling any time soon. He believes there will be another rally, and beyond that, there’s the principle of the thing. Many of the early investors in GameStop cheered as hedge funds bled money after shorting the stock significantly. Some new traders, like Kim, draw parallels between what’s happening now and the wave of Occupy Wall Street protests that shook the nation in 2011, but did little to offer permanent change.

This is different, says Kim. “This movement has teeth that Occupy Wall Street never had. We’re playing their game on an even playing field. … We bought our corner of Wall Street.”

Trading with an eye toward pop culture is not entirely new, according to Terrance Odean, a professor of finance at UC Berkeley’s Haas School of Business. In the late ’90s, as the dot-com bubble neared its peak, “there was a lot of trading and a lot of enthusiasm, and you could say many of the same things were going on,” he says. “The prices on some stocks spiked tremendously, with no clear rationale for the valuation, and then many of them came crashing down just as fast as they went up.”





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