GameStop bull 'Roaring Kitty,' MassMutual hit with securities lawsuit

Joanna Estrada
February 18, 2021

Keith Gill, better known by his YouTube name Roaring Kitty, was a prominent voice in promoting and holding GameStop stock on r/WallStreetBets.

Since the extreme trading volatility took off in mid-January, GameStop has swelled from about $39 to $348 at its peak, when the "Reddit basket" of meme stocks seized national attention and drew wall-to-wall coverage from media outlets well beyond the world of finance.

The online GameStop booster, Keith Gill, who goes by Roaring Kitty, plans to tell the lawmakers that he reaped a profit on his investment because he did his homework, and not because he touted the stock to "unwitting investors", according to his prepared remarks.

The stock, which traded as low as $4 last summer, soared as high as $483 in late January before the bubble burst. The prevailing analysis about GameStop's impending doom was simply wrong, ' Gill said in the testimony.

GameStop's improbable run has catapulted its stock to astronomical heights - rising as much as 1,745 percent for the year - propelled in part by ordinary investors, spurred by a Reddit message board and other online trading communities, looking to show up the giants of Wall Street and turn a bold gamble into a fortune.

'Whether other individual investors bought the stock was irrelevant to my thesis - my focus was on the fundamentals of the business, ' he said. "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 checking out the channel". "He caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill's act and bought GameStop stock during the market frenzy at greatly inflated prices".

The would-be plaintiff representing investors in the case, Christian Iovin of Washington state, sold $200,000 worth of call options on GameStop shares when the stock was below $100.

The lawsuit against Gill provided a greater extensive background into who Roaring Kitty actually is, a "highly sophisticated and calculated investor" who is a registered stockbroker at MassMutual in Boston, MA. Engadget has contacted Gill and MassMutual for comment.

The episode has been portrayed as a victory of the little guy over Wall Street titans, but not everyone is buying it. Lawmakers from both parties are among the skeptics.

Gill, whose YouTube channel has 417,000 subscribers, has said he was educating investors about his investment philosophy.

The hearing is titled "Game Stopped?" Gabriel Plotkin, Melvin Capital's founder and chief investment officer, also is scheduled to appear for the hearing. As the stocks skyrocketed, the eye-popping gains fueled a YOLO-trading feedback loop, as more investors jumped in so as not to miss out on the massive gains, even as the stock charts showed unbelievable spikes that dared earlier investors to sell and reap big rewards.

Also expected to testify is Ken Griffin, the CEO of Citadel, one of the biggest hedge funds.

Democrats and Republicans are united in their outrage by Robinhood's decision to suspend trading in the so-called "meme stocks" on January 28.

Tenev says Robinhood imposed the trading restrictions exclusively to meet capital requirements set by regulators. Citadel stepped in with a few other funds to rescue Melvin Capital Management after it sustained billions in losses on its GameStop bets.

The virtual hearing, entitled 'Game Stopped? "Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide".

Other reports by Click Lancashire

Discuss This Article

FOLLOW OUR NEWSPAPER