August 24 - Jitan Solanki
Discover the best markets and strategies to invest in during risky times.
The stock market: a place where money can be made and lost. The market’s also where reputations can be made or broken – and some people or incidents can live on in infamy…
In this section, which serves as a counterpart to the ubiquitous Monday Motivation posts that can get on a cynic’s nerves, we spotlight the blunders, bloopers and swindlers of the stock market.
Suffering from Monday blues? The only consolation we can offer is – it can always be WORSE!
Demotivation Monday: Bankrupt Overnight
In November 2015, a guy named Joe Campbell went to bed with $37,000 in his online brokerage account and woke up to find out that not only had he lost all his money – but he also owed ETrade more than $100,000.
He had placed a bet against a stock called KaloBio (known on Wall Street as ‘shorting’). Basically, he was betting that the little-known pharmaceutical company’s stock would fall further. The shares were trading at just $2 and he was counting on the price to drop to $1.
That risky bet blew up in his face because in after-hours trading, the stock unexpectedly surged following Turing Pharma CEO (and infamous ‘pharma bro’) Martin Shkreli’s disclosure of a majority stake in the company.
Campbell said he was in a “long meeting” and by the time he came out, KaloBios was trading around $16 per share. So not only was the balance in his account wiped out, but he also now owed ETrade a lot of money. He had mistakenly thought the online broker had a stop-loss that would automatically close a position if the account went to $0. (Luckily, at BUX, we guarantee this!)
The poor bugger then appealed for donations from other traders on a GoFundMe page, saying he was desperate enough to consider liquidating his and his wife’s retirement savings. No update on whether he started a second fundraising campaign for his divorce fees…