Here's some interesting comment about GME and Roaring Kitty from Barron's yesterday morning:
Meme Monday. Technology stocks rediscovered their winning ways today, on an up-and-down day for the broader market. The Nasdaq Composite rose by 0.6% after three-straight losing sessions, while the S&P 500 ticked up 0.1% and the Dow Jones Industrial Average slid 0.3%.
Nvidia notched its latest record high, up 4.9%, after announcing its next generation of artificial-intelligence chips. The stock has added 132% since the start of the year.
In YOLO news today, GameStop stock added 21% in a surge powered by the reemergence of Keith Gill, the trader known online as Roaring Kitty and DeepF—Value. The stock was up as much as 75% earlier in the trading day.
Gill was the key player in the videogame retailer's 2021 rally and returned to X and Reddit last month after a long social-media absence.
Yesterday, Gill posted a screenshot of his purported brokerage account, which showed a position with some $116 million worth of GameStop stock and $66 million of call options on the shares.
Gill followed up with another Reddit post this evening that again showed his E*Trade account—still holding 5 million GameStop shares and 120,000 call options with an expiration date of June 21 and a strike price of $20. Call options represent the right to buy shares at a given price before a specified date.
At GameStop's closing price of $28 today, the shares were worth $140 million and the options had a value of $120 million. Not a bad day in the market for Roaring Kitty.
Needless to say, he's attracting lots of attention.
Here's Barron's Connor Smith writing today:
The Wall Street Journal reported, citing people familiar with the matter, that E*Trade and its parent company Morgan Stanley were debating whether to close Gill’s account. The Journal reported Morgan Stanley employees found Gill purchased options contracts prior to kicking off a meme frenzy caused by breaking his posting hiatus in mid-May. The Journal also reported the Securities and Exchange Commission was looking into options trading around the May posts.
Gill couldn’t be reached for comment. An SEC representative declined to comment. An E*Trade representative declined to comment.
Columbia Law School Professor John Coffee told Barron's that even if Gill purchased options ahead of his posts, he doesn't see it as manipulation.
"I do not think the disclosure of your identity can be considered manipulative without more, even if you know that the market price will jump because they know of your past impact," Coffee says. "The intent must be to cause the market to jump to a price that you know cannot last. Roaring Kitty may actually believe in GameStock's currently high price."
Coffee likened the situation to a legendary investor like Carl Icahn who is known as a takeover entrepreneur.
"Such persons know that when they cross 5% of a public company stock and identify themselves, the market will jump because it infers a possible takeover bid," Coffee says.
Several other so-called meme stocks rallied today in conjunction with GameStop. AMC Entertainment Holdings added 11%, Faraday Future jumped 7%, and Virgin Galactic Holdings rose 5%.
Tomorrow should be another interesting day in the meme-stock world. GameStop stock was up more than 5% in after-hours trading this evening.
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