Roaring Kitty rockets GameStop stock with post revealing $116 million stake

[Simone Del Rosario]
GameStop’s stock popped more than 80% before markets opened Monday. But stop me if you’ve heard this before, there are no fundamentals behind the move.

Once again, the latest surge comes courtesy of a post by meme lord Keith Gill, AKA RoaringKitty, AKA deep effing value.

Late Sunday, Gill took to the SuperStonk subreddit to post what users are speculating is his position in the beleaguered video game retailer, and what a position it is.

The image shows 5 million shares worth nearly $116 million last week and 120,000 call options with a $20 strike price set to expire June 21.

A call option bets that a stock will go above the “strike” price by that expiration date. In Gill’s case, if it’s well above $20, he can make a good amount of money after fees. GameStop shares opened at $40 Monday morning.

Gill was an architect of the meme stock craze in 2021, but after a bunch of uproar leading to congressional hearings, documentaries and a feature-length film, he disappeared from the public eye.

But in mid-May, he made his triumphant return on X, posting meme after meme, pushing the GameStop stock to spike 175% before stabilizing.

[Keith Gill]
As for me, I like the stock.

[Simone Del Rosario]
But institutional investors and the like don’t care much for Gill. With his outsized internet influence on meme stock prices, plenty of people are debating whether what he’s doing is illegal or should be illegal. It’s a tough argument to make, he’s not trading on insider information, like I said, there aren’t really fundamentals behind this aside from maybe thinking the stock is undervalued, and he also doesn’t appear to be misleading investors.

Former SEC Chair Jay Clayton weighed in on this the last time Roaring Kitty reared his head a few weeks back.

[Jay Clayton]
“It’s not insider trading. That’s, that’s, that’s clear, and he’s trading on his own information. That’s why it’s not insider trading. But is this, is this something that we should be tolerating in our markets? Whether it’s legal or illegal, I don’t think so. It bothers me. It bothers me on many levels.”

[Simone Del Rosario]

It’s worth pointing out that Clayton says this on a network where people go on TV all the time to say they like a stock.

[Peter in Oklahoma]

“Calling about CEG, Constellation Energy Group, Buy, Sell or Hold.”

[Jim Cramer]

“We like those guys so much, we had em on, this has all the kind of energy I like.

[Simone Del Rosario]

For his part, Gill has long claimed he is just a fan of the company and even pointed out in written testimony that he never solicited anyone to buy or sell the stock for his profit.

Many are crying market manipulation after this latest round. But according to the SEC’s own website, it doesn’t seem to fit the bill. Could you imagine trying to prosecute him in court for posting a drawing of a guy sitting up in a gaming chair?