Benzinga - by Bibhu Pattnaik, Benzinga Staff Writer.
Keith Gill, the trading influencer popularly known as “Roaring Kitty,” has accumulated a $262 million stake in GameStop Corp. (NYSE:GME), leading to discussions about market manipulation in the meme-stock era.
What Happened: Gill’s substantial stake in GameStop Corp and its call options reached over $550 million on June 6. Despite his acquisition of more stock, the value of his holdings has decreased due to a slump in the company’s shares.
As the stock’s value remains relatively stable, apprehensions are mounting among Wall Street and retail traders. The 2021 GameStop rally, which challenged short-selling, has led to inquiries about what constitutes market manipulation in the current meme-stock era, reported Bloomberg.
Commenting on the development, Steve Sosnick, chief strategist at Interactive Brokers, said, "The original meme stock craze was us versus them, with ‘them' being the guys who would short-sell millennials' favorite companies like GameStop. But I'm not sure who ‘them' is anymore."
Gill, who spearheaded the 2021 short squeeze that rattled Wall Street, is now reportedly under increased scrutiny. Doubts have been raised about whether his comeback is a simple pump-and-dump scheme.
Also Read: Roaring Kitty Claws Back: GameStop Stock Pops On Position Update From Keith Gill — What You Need To Know
As Gill’s actions pushed the price up again, GameStop seized the opportunity by selling more than $2 billion worth of stock, leading to further discussions about market manipulation and the role of influencers in shaping stock market trends.
According to Bloomberg, by Thursday, Gill’s brokerage account details indicated he had sold off a previous holding of 120,000 call options and increased his stake in GameStop. This brought his portfolio to approximately 9 million shares of the video game retailer, valued at over $262 million.
By the end of 2021, Gill’s last update revealed he held 200,000 shares worth more than $30 million, a figure adjusted by a four-for-one stock split in July 2022.
Don Steinbrugge, chief executive officer of Agecroft Partners, told Bloomberg, "Some of the quantitative managers have models to look at the trends in price and those models are extremely quick to get out of the stock if they see significant downside volatility. At some point retail investors are going to wise up and realize there's a lot of danger."
Why It Matters: Gill’s return to social media and his significant stake in GameStop have reignited the meme-stock phenomenon reminiscent of the 2021 short squeeze.
Gill’s actions, including sharing various memes and videos, have helped boost GameStop shares. His recent position in the video game retailer has once again inspired confidence in the stock, leading to a surge in meme stocks like GameStop.
This has raised questions about the influence of social media influencers on stock market trends and potential market manipulation.
Now Read: Who Is Roaring Kitty? Why Does His Return To Social Media Matter For GameStop Stock?
This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.