© Reuters. FILE PHOTO: Keith Gill, an individual online investor in GameStop, testifies during an entirely virtual hearing of the US House of Representatives Committee on Financial Services entitled “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide? ”, In Washington, US, February 18, 2021. House Committee on Financial Services / Handout via Reuters
(Editor’s note: This story contains language in the 4th and 8th paragraphs that some readers may find offensive.)
By Michelle Price
WASHINGTON (Reuters) – A year ago, office worker Keith Gill shot to global notoriety when his “Roaring Kitty” YouTube persona stoked a trading frenzy with bullish bets that propelled shares of retailer GameStop (NYSE 🙂 to eye-popping gains and saddled hedge funds that had bet against the stock with billions of dollars in losses.
Gill has returned to obscurity: albeit much richer thanks to his GameStop positions that at one point reached $ 48 million in value. He no longer works in marketing at insurer MassMutual.
The Massachusetts securities regulator is still probing Gill’s activities around the Reddit rally, a spokeswoman said. But in April, a court dismissed a lawsuit alleging Gill violated securities laws by inciting the rally in GameStop and causing “huge losses” for investors.
Known as “Roaring Kitty” on YouTube and “DeepF *** ingValue” on Reddit’s popular WallStreetBets forum, Gill was a key figure in the so-called “Reddit rally” which saw shares of GameStop surge 1600% at one point in Jan. 2021
The stock, which peaked at $ 482.95 a share when hedge funds that had shorted GameStop were forced to buy at any price, has come back to earth. But it is still at about $ 112 a share, compared to less than $ 20 on Jan. 1, 2021.
With colorful YouTube streams and Reddit posts touting his GameStop positions, Gill made the bull case for GameStop, helping to attract a flood of retail cash into the beleaguered bricks-and-mortar retailer.
The furious rally in GameStop and other “memestocks” burned hedge funds, rocked Wall Street and drew scrutiny from state and federal regulators. Gill and other traders and financial executives were grilled in the US Congress.
Gill faded away almost as quickly as he shot to fame. His last posts on WallStreetBets via his ‘DeepF ** ingValue’ handle and his Roaring Kitty YouTube stream were on April 16, 2021. The last tweet from his @TheRoaringKitty handle, a video of a kitten, was on June 18, 2021.
A public records search indicates Gill has no new business ventures. Gill did not respond to requests for comment.
But in testimony last year to Congress, he denied the notion that he used social media to profit by promoting GameStop to unwitting investors.
“I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks,” he told lawmakers, adding his investment thesis focused purely on GameStop’s fundamentals.
“We’ve learned just what someone like that can do to the market and to investors,” said Joshua Mitts, an associate professor at Columbia Law School who has researched the use of social media to influence stocks.
Mitts said the meme stock rally was driven by an unusual combination of factors: an army of new retail traders, easy money thanks to pandemic stimulus and low interest rates, and Gill’s purportedly massive and consistent profits.
Still, he said, it could happen again.
“What I expect to see going forward is social media personalities making money by driving prices in one direction or another – not necessarily in the magnitude that we had.”
The US Securities and Exchange Commission declined to comment on whether it was probing, or ever had probed, Gill’s actions.
Howard Fischer, a partner at law firm Moses & Singer, said it remained unclear whether Gill broke any laws. Yet he said his fanatical following among retail traders appeared to be based on “tribal identity” rather than economics, and was troubling.
“It might be too early to determine whether that was simply a fad that has now run its course, or whether it represents a fundamental alteration of market practice.”
Gill began sharing his positions on WallStreetBets in September 2019, posting a screenshot indicating he had invested $ 53,000 in GameStop. By late Jan. 2021, Gill was up over 4,000% on stock and options in the company, with his GameStop position plus cash worth nearly $ 48 million, according to his posts.
In his last April 16 post on WallStreetBets, Gill shared screen shots showing he had exercised call options on GameStop to acquire 50,000 more shares in the retailer, sparking thousands of comments lauding the punchy move.
“He made the history books,” wrote one Reddit user with the handle zammai. “Just retire a legend and go off the grid.”