Nearly five years ago, Keith Gill, also known as “DeepF——Value” on Reddit and “Roaring Kitty” on YouTube, made a $53,000 bet on GameStop, his favorite video game retailer. Little did he know that this investment would lead to his net worth ballooning to over $289 million in just a few years. Gill shared a screenshot of his portfolio, showcasing his 5 million shares of GameStop and 120,000 call options, even after a 21% rally. This move resulted in him making a staggering $79 million in paper profits in a single trading day.
Keith Gill’s rise to fame came as he encouraged a band of retail traders to squeeze out short selling hedge funds by sharing his GameStop positions online. Despite the struggles that GameStop faced due to its shift away from brick-and-mortar video game purchases to e-commerce, Gill believed in the deep value of the stock. His successful trading strategy caught the attention of many, with Michael Khouw, co-founder and chief strategist of OpenInterest.PRO, acknowledging that Gill’s trading prowess was unparalleled. However, Khouw also highlighted the risks involved, stating that professional traders would never make the kind of numbers Gill was achieving.
While Keith Gill’s success story is impressive, he may encounter some obstacles along the way. Reports emerged that Morgan Stanley’s E-Trade broker was considering removing him due to concerns about market manipulation. CNBC was unable to verify Gill’s GameStop stake and portfolio, raising doubts about the authenticity of his claims. Gill’s current portfolio includes 120,000 call options with a strike price of $20, expiring on June 21. If the stock closes above $20 on that day, Gill could exercise the options, potentially owning an additional 12 million shares. This move would make him the fourth largest shareholder in GameStop, behind Vanguard, BlackRock, and Ryan Cohen’s RC Ventures.
Should Keith Gill decide to exercise the call options, he could end up with a stake worth $476 million at the current stock price of $28, and even more at the recent peak of $64.83. However, the cost of acquiring such a stake through this method would be substantial. Gill also has the option to roll the call options to a later expiration date to buy more time, but this would come with additional costs. The pressure from other market participants could also impact the stock price as Gill continues to navigate his investment in GameStop. As of now, shares of GameStop are down about 2% on Tuesday, indicating the volatility and uncertainty surrounding Gill’s trading moves.
Keith Gill’s journey from a $53,000 bet on GameStop to a multi-million dollar portfolio is a testament to his unconventional trading style and risk tolerance. While his success has garnered attention and admiration, the challenges he faces in handling his massive GameStop stake highlight the complexities of navigating the stock market. Only time will tell what lies ahead for Keith Gill and his high-stakes investment in GameStop.