Nate Ballarino is willing to ride his small stake in GameStop Corp. for however long it takes.

A quiet member of Reddit's WallStreetBets thread, the 24-year-old RV salesman and part-time student at the University of Massachusetts Dartmouth waded into the GameStop frenzy at 9:46 a.m. ET on Jan. 25 when he bought 12 shares of the company at about $80 each. Since then, Ballarino has expanded his position in the video game retailer to a little more than 43 shares that carried a market value of about $9,700 after a volatile day of trading Feb. 1. Even after the stock's sharp drop of about 50% the morning of Feb. 2, Ballarino is holding strong in believing the price would rebound later and could go on to reach four figures.

"I'm holding, baby, holding all the way up," Ballarino said in an interview. "I'm just looking at my screen with a grin. This is like I'm watching a sports game or something."

Meet the new day trader.

Emboldened by zero-commission trading, looser margin requirements and technology that puts the stock market at their fingertips, an army of small investors that runs the gamut from college students and dentists to lawyers and nurses is piling into some of the hottest trades Wall Street has seen in years.

GameStop, a brick-and-mortar retailer that deals in used and new video games, has been at the center of it all. Once the most heavily shorted stock in the S&P 500, GameStop's 1,084.3% rise in 2021 has hammered hedge funds betting against the company, forced retail brokerages to limit some trades and drawn the ire of Wall Street heavyweights who have called market manipulation on the retail investors believed to have helped spark the jump. The episode has caught attention in Washington, D.C., where lawmakers are gearing up for hearings and the U.S. Securities and Exchange Commission released a rare statement on the market volatility. And in a twist WallStreetBets likely never intended, GameStop's meteoric rise has lined the pockets of big time investors as well as the small-time traders like Ballarino.

For some Redditors invested in GameStop, the stock represents a classic value play, and they are not alone in their thinking. Ryan Cohen, the founder of Chewy Inc., took on an activist position in GameStop back in late 2020. The company "needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences — not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem," Cohen, a managing member of RC Ventures LLC, wrote to the GameStop board in November 2020.

But many Reddit users see this moment as cathartic justice following years of frustration over the wealth the financial industry has enjoyed since the 2008 financial crisis. And, for a few, it was simply a trade too good to miss out on. Reddit traders bet that the hedge funds shorting the stock were overleveraged, and that the sheer power of a retail-led push would clear the way for a run-up in the stock, squeeze the shorts and, eventually, force them to drive the price even higher when they buy back the shares to cash out their short positions.

Now, everyone following the rise of GameStop's stock is asking: How does this all end?

"The fervor that people were buying these stocks with, it was beyond this stock's 'going to the moon.' There was a real zeal to it," Interactive Brokers Group Inc. Chief Strategist Steve Sosnick said in an interview. "Bubbles and manias tend to run their course. This one is lurching toward an unpleasant ending."

'Along for the ride'

Kevin, who works in e-commerce in Connecticut who asked that his last name not be used because of potential implications to his job, began buying GameStop shares in late November on his Fidelity Investments brokerage account after following the chatter around GameStop on WallStreetBets for weeks. The 27-year-old amassed a position in GameStop of about 6,900 shares for a total $144,000 investment.

Then, on the morning of Feb. 1, he cashed out all but one of his shares, walking away with more than $1.8 million in the process, according to a screenshot of his brokerage account that he shared with S&P Global Market Intelligence.

"The writing is on the wall," Kevin said in a Feb. 1 interview after the market closed and GameStop's shares had plunged more than 30%. "I think it's pretty much over."

Kevin believes institutional investors, not retail investors like him, have been the driving force behind GameStop. So, when GameStop shares opened under pressure Feb. 1 after data was released that showed the short interest in the stock had plunged, Kevin took it as a sign of an impending crash.

"WallStreetBets collectively is a drop in the bucket," he said. "Fundamentally, retail has no impact. All these other firms and institutions that are long on [GameStop] are the ones making money on it. These are all huge institutions that own millions upon millions of shares. They're the ones that are laughing. We're just along for the ride."

GameStop's largest shareholders are Fidelity, Cohen and BlackRock Inc., according to S&P Global Market Intelligence data. Cohen, who now sits on GameStop's board, owned 9 million shares of the stock as of Jan. 10, when shares were about $19 each. In the ensuing three-plus weeks, that position had grown by more than $800 million, or 472.3%.

Some data indicates that other institutional powers may have had a hand in buying up GameStop over the past few weeks too. Citadel Securities LLC, the Ken Griffin-controlled trading giant that executes retail orders on behalf of brokerages, received about 75 million sell orders in the stock from retail brokerages from Jan. 25 to Jan. 28. The brokers sent just under 74.5 million buy orders at the same time, complicating the narrative that retail traders were buying and holding en masse.

Citadel Securities is a separate entity from Griffin's hedge fund, Citadel Advisors LLC.

'Blood in the water'

Citadel Advisors, along with its partners, recently injected about $2 billion into Melvin Capital Management LP after Melvin Capital suffered a 30% loss from a handful of short bets like GameStop that went wrong. The short squeeze in GameStop, along with other stocks, set the stage for Melvin Capital's holdings to plunge 53% in January, according to a recent report from The Wall Street Journal. Melvin Capital did not respond to requests for comment Feb. 2.

Melvin Capital has reportedly stopped shorting GameStop altogether, as have other funds that have wound down their shorts against the company, according to The Wall Street Journal. Data from S3 Partners provided to S&P Global Market Intelligence showed short interest in GameStop had dropped to about 53% of the stock's total float as of Feb. 1. The number of GameStop shares shorted over the past week has dropped 56%, S3 Partners Managing Director Ihor Dusaniwsky wrote in an email.

And yet, while GameStop's stock took a bruising to open the month of February as investors grappled with shorts covering their positions, Ballarino keeps holding on to the 43 shares he holds in a Robinhood Markets Inc. account. Ballarino's thesis for the stock rising further is that there remain shorts who still need to cover, which will eventually push the price higher as they buy back the shares they had originally loaned to short the stock.

"They're desperate. They're panicking. And we see blood in the water," he said of the short sellers.

Ballarino said he submitted three limit sell orders soon after the market's open Feb. 1 at a price he thinks is high enough: $3,999.69.