How One Online Investor Made the Score of a Lifetime on GameStop

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

Tracy, we're finally doing it. We're finally recording the episode.

Tracy Alloway (0:23)

The episode. Well, yeah, it's definitely what everyone is talking about, isn't it?

Joe Weisenthal (0:29)

It's the only story in financial markets right now.

We've got a million requests to do it. We're talking about GameStop, obviously.

Tracy Alloway (0:38)

Yeah, where to even begin describing this? There's a subreddit called WallStreetBets, and a bunch of people on the subreddit decided to trade GameStop.

There are a bunch of different theories about why they looked at that particular stock.

But what's happened since then is that they've basically forced it to go up by an astronomical amount. We've seen people on the other side of that trade, notably a hedge fund called Melvin Capital that had a big short position has suffered massive losses and basically had to be thrown a lifeline by some other hedge funds.

And meanwhile, we've seen this phenomenon of I guess social media fueled a specific stock targeted trading, this retail trading en masse. We've seen that extend to a lot of other stocks in the market, AMC, American Airlines, and OK. There's a lot going on right now. I don't even think I did it justice. Let's just say it's the craziest week I've seen in markets in my entire career.

Joe Weisenthal (1:42)

Yeah, I think that's right.

We've both seen crashes at times in our career, but crashes are familiar things. They're common, they happen. We have never really seen anything like this, the perfect storm that's come together with hedge funds shorting a stock, social media driving it to the moon, and then the trade itself becoming a meme, driving it even higher, causing all kinds of losses, hedge funds not just covering their short, but liquidating their winners to maintain within their volatility parameters. The story is everything, and now we're gonna dig into it.

Tracy Alloway (2:18)

Okay, I'm excited. There's one big question, which I think a lot of people are focused on at the moment, and that's whether or not GameStop and what's happening in a lot of other meme stocks at the moment, whether that's due to a structural weakness that Redditors have basically identified, and we've spoken about it on Odd Lots before, or whether it's something more, I don't know how to describe it, cultural or fundamental, whether people actually believe that GameStop should be a buy and the shares should be going up as much.

Joe Weisenthal (2:53)

Yeah, totally wild. All right, I am very excited because we are going to be speaking with a participant in the GameStop trade, the big long, someone who has been bullish on the company for a while.

While everyone else was saying the company was dead, while everyone was saying this was gonna be the next blockbuster and going out of business, our guest today has been a believer for a while. So we are going to, we'll just get right into it. No more throat clearing. We are going to be speaking with Rod Alzmann. He is a retail investor, but he is part of the crew that put together the website gmedd.com. DD stands for due diligence. GME is the GameStop ticker, where they collect the bull case for GameStop.

He's been long GameStop for several years.

He's starting when the stock was in the teens. He watched it go down, stuck with it. And now finally the big long is paying off, paid off massively beyond anyone's expectations. We're gonna talk about the trade. So Rod, thank you so much for joining us.

Rod Alzmann (3:58)

Well, Joe, Tracy, it's a pleasure to be here. Love the podcast. It's kind of mind blowing that I'm on it with you right now.

Joe Weisenthal (4:04)

Well, it is kind of mind blowing for us to be talking with a participant in the GameStop trade. So let's start at the very beginning.

A lot of people have been following this for the last week. As I mentioned, you've been following it for a few years, a long time GameStop bull. What attracted, what's your background? How did you get into investing and market? And how did you zero in on GameStop specifically as a potential for a big payoff?

Rod Alzmann (4:34)

Yeah, Joe, let me go rewind way back. I'm 31 years old, so I've lived through in undergrad the financial crisis, but even before the financial crisis, I've always personally had an interest in markets and investing, kind of a nerd.

I bought indirectly through my father as a custodian GameStop stock in around 2003 or so as my first ever investment, as a matter of fact. And at the time, it was purely a function of, I'm a kid who goes in the mall and I see all these people and I love video games and I see how many other people seem to love video games and great. I told them to buy it and it paid off because they had a merger with an acquisition with Electronics Boutique in 2005 The stock did pretty well up through the financial crisis peak.