Benzinga - by Shanthi Rexaline, Benzinga Editor.
After Keith Gill, also known as “Roaring Kitty,” created a flutter in the market on Monday by sending GameStop Corp. (NYSE:GME) shares higher by disclosing a huge stake in the video-game retailer, short seller Andrew Left raised doubts about whether it was someone else operating undercover.
Different Story: “So much is wrong,” with the way GameStop traded, said Left in an interview with Yahoo Finance. The first time, when meme stocks rallied three-and-a-half years ago, Roaring Kitty put in an actual thesis and made a video explaining why GameStop was undervalued, he said. The investment thesis nevertheless was wrong, he added.
The stock went higher and the rest is folklore, Left said.
Monday was “totally different,” he said. “He puts this monster position, no thesis…short-term options. I personally do not believe this is his own personal money.”
The size of the trade he disclosed was $150 million, Left noted. Assuming he made $200 million the first time around in 2021, after taxes he would have $100 million, he said. The short-seller expressed doubts regarding Gill putting all his net worth on the trade. He noted that reports on the web suggest he made $50 million to $60 million back in 2021.
“I just don’t think it’s his money… there should be some form of disclosure. If It’s not, you know, that he went out there to really shake this world,” Left said. He also harped about Gill not giving an investment thesis to back his purchase.
Left said it could be that Roaring Kitty has material non-public information but sees slim chances of it. “I don’t think, there is anything GameStop is gonna say in the next two weeks,” he said.
“What he’s doing right now is trying to take advantage of the retail traders, the same people that he was supposed to represent three-and-a-half years ago,” Left said.
Left’s Position: Whenever someone shorts GameStop stock, they have to do it cautiously, Left said. Traders learned three-and-half years ago that anything can happen and the last thing one would want to say is “It’s different this time,” he said,
But certain things are different this time, Left said, adding that the short interest may not be as elevated as in 2021 and the capital structure is different. “If given the opportunity to short the stock while it was $40 this morning, it’s great. I don’t recommend people short stocks but I think anyone who is buying the stock right now, I think they are gonna get it is short term,” he added.
“I think they won’t have any patience for the ‘kitty nonsense.'”
Citron Research’s post on X echoed the same sentiment, with the firm stating that Roaring Kitty’s recent trade appeared more like manipulation without a solid thesis. “Considering the stock is now 2,000% higher than his initial video almost 4 years ago. We believe someone is backing Gill—there’s no way he made this size trade alone. His reported finances don’t support t his trade. Investors will see through this roaring Icarus,” it said.
GameStop’s Future: Even Ryan Cohen, the chairman and CEO of GameStop, doesn’t think it is a company, Left said. “They pretty much almost abandoned their strategy.. he [Cohen] wants to use the money in the corporate coffers to go ahead and do outside investments,” he said.
Left also delved into the different iterations the company went through in the past three years. It was doing something in the crypto space and then it tried streaming and partnership, he said. None of these worked and GameStop will now be an investment vehicle for Cohen, he added.
GameStop, which rallied 21% to $28 on Monday, added another 8.43%, according to Benzinga Pro data.
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