Wall Street Eyes ‘Roaring Kitty’ as Meme Stock Frenzy Resurfaces
Keith Gill, the investor famously known as “Roaring Kitty,” has sparked another wave of interest in meme stocks, prompting Wall Street to consider regulatory action. Gill, who previously played a significant role in the 2021 GameStop trading frenzy, disclosed in a recent Reddit post that he purchased nearly $116 million worth of GameStop stock and 120,000 call options with a $20 strike price.
These call options grant Gill the right to buy 12 million shares of GameStop at $20 each. With GameStop shares closing at $46.55 on Wednesday, the value of his position has more than doubled. A screenshot shared by Gill on Monday indicated he had made $54 million in gains in just one trading session, and by Thursday, his holdings were reportedly worth over $500 million.
Gill’s return to social media has reignited the fervour around meme stocks like GameStop and AMC Entertainment, reminiscent of the 2021 market mania. Meme stocks, which often see significant price swings based on social media trends rather than company fundamentals, have surged once again.
The resurgence of trading in these stocks has raised questions about whether Gill’s activities should be scrutinized by regulators. While Gill has not explicitly advised others to buy GameStop shares, his posts—consisting mainly of memes, gifs, and portfolio screenshots—have nonetheless driven significant market movements.
The Wall Street Journal reported that trading platform E*Trade, where the screenshots appear to originate, is considering removing Gill. Additionally, it was revealed that Gill purchased a large volume of GameStop options before his first post on X (formerly Twitter) in May after a three-year hiatus.
Jay Woods, chief global strategist at Freedom Capital Markets, suggested that while Gill’s actions might be seen as unethical, they are not necessarily illegal since he has not directly encouraged others to buy the stock.
The Securities and Exchange Commission (SEC) is reportedly investigating the trading activity surrounding GameStop call options following Gill’s posts, with concerns that his actions could constitute market manipulation. The Massachusetts securities division is also probing Gill’s trading activities.
Despite potential regulatory action, it remains uncertain whether this will dampen the enthusiasm of Gill’s supporters or further embolden them. The original meme stock craze was fueled by retail investors aiming to challenge Wall Street’s dominance, and any backlash against Gill could revive similar sentiments.
In an unexpected move, GameStop advanced its first-quarter earnings announcement to Friday. The company reported a loss of $32.3 million, an improvement from the $50.5 million loss the previous year. First-quarter sales also declined to $0.9 billion from $1.2 billion.
With a livestream scheduled on the Roaring Kitty YouTube channel, Wall Street will be closely monitoring for any indications of Gill’s future moves and their potential impact on market regulations.
“There are significant implications here, as people want to know what is and isn’t permissible online,” Woods remarked. “These market movements are anything but ordinary.”
