Reddit trader who led GameStop stock frenzy loses $13 million in one day
The Reddit trader who claimed he made tens of millions of dollars leading an army of amateur investors to snap up shares of GameStop — a campaign framed as pitting Main Street versus Wall Street — lost $13 million on Tuesday as shares of the struggling video game retailer retreated.
Keith Gill, who goes by the name "DeepF***ingValue" on Reddit and "Roaring Kitty" on YouTube, revealed in a post on the WallStreetBets discussion board that the value of his GameStop holdings had sunk to $7.6 million. That was down from nearly $21 million the previous day and as much as $50 million from last week, when GameStop's shares peaked at $483 each.
On Tuesday, Gill tweeted an image of a kitten with a shocked look raising a paw to its face.
$GME pic.twitter.com/9eNdDOEZFH
— Roaring Kitty (@TheRoaringKitty) February 2, 2021
Gill still appears to be solidly in the black on his GameStop investment. The brokerage statement that the former MassMutual financial adviser posted on Tuesday night on Reddit showed a cash balance of nearly $13 million. He first publicly disclosed that he was buying shares of GameStop in mid-2019. At the time, the stock traded for just over $4 a share, while options to buy the shares cost around $50,000.
Many average investors who rushed into GameStop's stock and cheered each other on in the WallStreetBets Reddit forum are unlikely to have notched such outsized profits. GameStop shares were up slightly on Wednesday to just over $93 as of midday. But the retailer's stock price has plunged in the past week, losing more than 80% of its value and erasing nearly $30 billion from the accounts of GameStop investors.
U.S. Treasury Secretary Janet Yellen will meet with other top regulators later this week to discuss the volatile trading in GameStop, as well as the shares of other so-called "meme stock" companies and even the price of silver, all seemingly caught up in the recent trading frenzy stoked by social media.
Shares of movie theater chain AMC Entertainment were also rebounding slightly on Wednesday, up to nearly $8.50, after plunging 40% on Tuesday. Shares of the former mobile device maker BlackBerry, another stock that was heavily mentioned in WallStreetBets, were up just 14 cents on Wednesday to just under $12. Shares of that company had been as high as $28 last week.
The stock-price moves come amid growing evidence that some hedge funds have been playing both sides of the GameStop drama. On Tuesday, Bloomberg reported that Mudrick Capital, a $3 billion hedge fund, made nearly $200 million betting the shares of AMC and GameStop would rise last month. It has been previously reported that a number of hedge funds had been shorting, or betting against, GameStop and other shares, contributing to the spikes in those companies' shares.
There are also concerns that discussion on WallStreetBets is being disrupted by bots. CBS MoneyWatch reported on Monday that the moderators of the discussion board had recently detected a "large amount" of bot activity in the stock-recommendation content being posted to its group.