'Roaring Kitty' Trader Returns, Causing GameStop Shares To Jump More Than 70% (cbsnews.com) 33
GameStop shares surged over 72% on Monday after Keith Gill, also known as "Roaring Kitty," returned to social media following a three-year hiatus. Gill gained notoriety for his role in the 2020 meme stock frenzy, where he encouraged amateur investors to buy GameStop shares, significantly driving up the stock price and challenging hedge funds. From a report: He resurfaced on X, Sunday night, with an image of a sketched man leaning forward in a chair, marking the end of a roughly three-year hiatus. He followed that post with several others featuring various comeback-themed videos featuring movie clips and charged music.
GameStop had experienced declining sales amid an industrywide pivot from game cartridges to video game streaming and digital downloads, but with the help from meme stock investors, last March the company turned its first profit in two years. Before then, the company had posted seven straight quarterly losses. This January, GameStop reported its first annual profit since 2018. Roaring Kitty's post helped bump GameStop's share price to $28.25 on Monday. GameStop's all-time high stock price is $120.75 in January 2021.
GameStop had experienced declining sales amid an industrywide pivot from game cartridges to video game streaming and digital downloads, but with the help from meme stock investors, last March the company turned its first profit in two years. Before then, the company had posted seven straight quarterly losses. This January, GameStop reported its first annual profit since 2018. Roaring Kitty's post helped bump GameStop's share price to $28.25 on Monday. GameStop's all-time high stock price is $120.75 in January 2021.
must have spent it all (Score:3)
He must have spent his profits already. Time for another round of pump and dump.
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Technically pump-and-dump requires "false and misleading positive statements." So I don't think it would be illegal to say, "hey everybody I just bought a bunch of GameStop, hoping you all will too so the price goes up. It worked last time, let's do it again!!!"
Be careful. You might just accidentally describe exactly how the scam of Walk Street, “works”.
Re:must have spent it all (Score:5, Insightful)
Exactly when did he sell last time around and when exactly did he tell people he was selling?
https://en.wikipedia.org/wiki/... [wikipedia.org]
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He very likely didn't say anything about selling, because of the legion of angry bagholders that had already formed.
If you think he sold, I encourage you to prove it. (Score:4, Interesting)
If you can produce solid evidence RoaringKitty sold, I think there will be lots of Gamestop investors very interested.
But I don't think you can.
Because I don't think he sold.
RoaringKitty has been incredibly consistent at stating that that he was in Gamestop for its long term upside, not for its short term short squeeze potential. He stated his reasons for buying in incredible length and detail, and it was based on facts, not hype. Considering that the company has just had a recent profitable quarter (after a steady march to profitability up from very UNprofitable a few years ago), and has had, for the past few years, about a billion dollars of unspent cash reserves just sitting around waiting to be used, and has an incredibly motivated leadership and a CEO who is paid in stock (not dollars), his initial positive long term outlook seems quite justified.
Also note that the claim made in TFA (the cbsnews.com article) is obviously false. RoaringKitty tweeting didn't "cause Gamestop to jump". It already abruptly rose from about 10 a couple of weeks ago to about 20 at the end of last week. RoaringKitty posted on Sunday. He was reacting to Gamestop's rise, not causing it. Hence the meme he posted about sitting up in his chair. He may have poured a bit of gasoline on the fire, but the fire was already burning quite brightly (and accelerating) before he posted anything.
However, the short squeeze potential still exists. There is lots of evidence that there are still hedge funds with massive short positions in Gamestop that will eventually have to be purchased back. (They testified to Congress that they had "covered" their short positions, not "closed" them. There is a difference!)
The hedge funds are still spending large amounts of money to try to suppress anything positive in media about Gamestop. Have you noticed how many financial media sources were bought up by hedge funds in the last 20 years or so? Why, do you suppose, would they do that? There are also clearly still PR firms being paid to detect any positive sentiment on Social Media, and squash it down ASAP using shill accounts. Even here. The following article is a good overview of what's been going on. It's a bit dated, but I highly recommend reading it if you are an investor in the stock market, whether in Gamestop or somewhere else. Coordinated market manipulation is very real.
https://upsidechronicles.com/2... [upsidechronicles.com]
This recent video also covers a lot of the major points of the actual current bull thesis for Gamestop:
https://twitter.com/cancelcloc... [twitter.com]
(My guess is that the current rise is maybe due to one of the shorting hedge funds deciding to (or being forced to) cash out, leaving the rest of them to try to limit the resulting damage. Retail investors didn't cause this move. There's much, much too much money involved, and Gamestop investors are already pretty much tapped out due to buying the dips for the past six months. If they had that kind of money, they would have already spent it buying shares at low prices and DRSing them to remove them from potential hedge fund borrowing.)
If you want to have a hint as to what's going on, check out https://www.reddit.com/r/Super... [reddit.com] (or https://old.reddit.com/r/Super... [reddit.com] if you don't have a Reddit account), where actual Gamestop investors hang out. There are still a lot of shills and fake accounts there too, and you still need to keep your wits about you, but the regulars know about the shills and actively push back on them (using technology to filter out massive numbers of fake accounts trying to join, for instance), and you can at least learn why people choose to invest in Gamestop despite all the negative press you read about it in ot
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If it isn't "Pump-and-dump", what would you call it then?
Give me one legitimate reason for there to be a massive rush on the stock opening bell Monday morning that saw more trades in the first hour than was seen on GME in the previous two weeks? Did GME have any business news that justified its stock almost doubling in value?
No? Then clearly someone is pumping up the value of the stock for the purposes of dumping it later. Particularly suspicious was how GME didn't stop gaining value from open until 10am
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Give me one legitimate reason
A bubble. A bubble is a legitimate reason. It's not a good reason, but very few of our economic fads seem to be based on sensible well-grounded investment.
Also, this guy hasn't said anything about GME in his new posts. If he's pumping any stock, we don't know which one yet. GME has rallied just on the notion of his presence. That's a bubble.
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Just because there isn't a name or law for something doesn't mean you get to pick a favorite hang-up out of your ass and make accusations.
Maybe it could be a proven to be a conspiratorial pump and dump scheme. If so, my bet is that will happen: the Powers That Be were upset enough about it last time to sic a couple of the precious few effective feebs on it, and the group doing it doubtless includes enough crack brained chuckleheads that weren't difficult to flip, bug or otherwise compromise in the meanti
Re:must have spent it all (Score:5, Informative)
In a normal pump and dump, the stock is hyped up, suckers buy it, then the price goes down leaving the suckers to book the loss.
GME was slightly different because it was not the people who were long on GME who lost money. It was the shorts who were forced to cover when GME went to the moon who lost money. This was noteworthy because the so-called smart money (hedge funds) were short GME and lost money. And the so-called dumb money (meme stock traders) mostly gained. It was more like a coordinated short squeeze play where a bunch of "dumb money" got together and executed a short sqeeze against "smart money." Not really a pump and dump because mostly only the shorts got burned.
The short interest in GME was in excess of 100 percent of the outstanding shares. So Roaring Kitty saw an opportunity. What he may be up to now I don't know. I don't see any reason to buy GME again. The short interest in GME is not excessive any more. Maybe there will be some other play.
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Plenty of people lost money buying GME at the wrong time. It didn't stay way up.
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Plenty of people lost money buying GME at the wrong time. It didn't stay way up.
FOMOers getting caught up in a news cycle too late and losing money still doesn't make something a pump and dump scheme.
Also I challenge your view that "it didn't stay way up". Last week was a 3 year low for GME, and the stock price was still 10x higher than what it was before the meme stock craze took off, and less than 10x lower from the absolute peak of heightened stupidity.
In fact if you bought at the absolute peak on the 29th of Jan, you could have sold in March and made less than 15% losses, or in Jun
Re:must have spent it all (Score:5, Interesting)
It seems to me that there are a number of problems with this analysis.
First of all, Roaring Kitty was not pushing the short squeeze. He is a long-term-value investor (hence his Reddit username, r/DeepFuckingValue), and he was pushing GME's long term value, not its short squeeze potential. Others pushed the short squeeze angle, but not him.
Second, according to the SEC's report after the "squeeze", the rise in price was not due to an actual short squeeze occurring. What happened was a gamma spike due to unexpected retail buy-in, causing market makers to have to buy shares also to hedge the options trades that they were on the other side of. A short squeeze might plausibly have been triggered soon if the gamma spike had gotten much higher, but other evidence suggests that high level companies (Instinet, Apex, etc.) suddenly pressured brokers (RobinHood, ETrade, etc.) to "turn off the buy button", preventing retail customers from buying Gamestop shares while still allowing them to sell shares. (This had never happened before in the history of the stock market!) So there has been no actual short squeeze on Gamestop... yet, despite all those media articles you have read claiming that a short squeeze happened and it was now totally over. (So over. So very very over.)
Second of all, the reason the short interest dropped from over 100 to levels similar to now wasn't because short sellers sold off their shares. It was because S3, the company reporting the short interest, suddenly changed their formula for calculating short interest (right in the middle of all the spiking prices of GME.. odd timing, don't you think?) to a new formula that by definition couldn't report a value over 100%. A lot of media sources (many controlled by hedge funds) suddenly falsely reported that as "short interest dropped" but that was simply not true. The formula changed suddenly, but the numbers used to make it up did not.
Third, there has been lots of evidence that the short sellers, rather than buying back their short positions (which would have caused the price to RISE, not FALL around the time of the GME spike in 2021) have instead used various kinds of swaps to hide their short positions by pushing them temporarily onto other entities (like banks) in exchange for temporary interest in other investments. If they had actually bought back shares to close (not just "cover") their short positions, GME wouldn't be nearly as volatile as it has been, but that degree of shorting creates volatility and bizarre stock price behavior. There are quite a lot of strange things going on with GME, and very few of them are of a magnitude that retail investors, even working all together in a coordinated fashion (as if they could!), could affect. There simply isn't enough money among retail investors to make those kinds of huge moves that quickly. (Nor do retail investors typically buy large numbers of shares in round lots, or after hours, or ....)
Fourth, you are ignoring the DRS movement, and the fact that Gamestop investors have been buying up shares of Gamestop and then direct-registering them to prevent them from being loaned by brokers for further shorting to lower the stock price. At last count, Gamestop investors had direct-registered fully 25% of the company's shares (and a larger percent of the float, of course) and were continuing to do so. That's never happened before, to any company. Shortly after that, for mysterious reasons, Gamestop started reporting numbers quoted from the DTCC rather than their own registrar's numbers (possibly because they were forced to), and those quoted numbers stayed suspiciously EXACTLY at 25% for several quarters, so we don't know what the current DRS total is at the moment, but at the rate it was climbing when that happened, it would have been big enough to start to cause big worries for short sellers at right about April of this year. Which is to say, right about now. Also, short sellers were well aware that if they had continued to drop the price, retail investors would have bought all the shares and direct registered them, and that would have been "game over" (entire float direct-registered, or even potentially every share, so the company could go private or take various other actions to force shorts to buy back immediately) so that is one reason why the price didn't just drop below $10 to $1 or lower. (Google "cellar boxing")
This video is a good quick overview:
https://twitter.com/cancelcloc... [twitter.com]
but a lot better information can be found in the FAQs for the "SuperStonk" subreddit, such as:
https://www.reddit.com/r/Super... [reddit.com]
https://www.reddit.com/r/Super... [reddit.com]
and the articles they link to.
The main takeaway is this: Whether or not you invest in Gamestop, you should keep in mind that hedge funds own a lot of media companies and financial websites, and have lots of money to pay for people to create accounts on social media sites. There's an ENORMOUS profit incentive for them to do so, and very little traceability, and hence very little potential for enforcement of laws against market manipulation. Beware of people who cast scorn on specific stocks and their investors and yet are unwilling to clearly and accurately state the reasons that those investors are using to justify their investments, or to honestly confront those reasons with real independently-verifiable data (not just disparaging remarks) showing why those reasons are wrong. Ad-hominem attacks from ACs or brand new accounts are not the same as evidence. Proof by threat (e.g. "You're an idiot if you think GME will rise. You'll lose all your money.") is also not evidence.
If the GME "bear" thesis was true, and Gamestop was really just a "slowly dying retailer being kept alive by cultists", the stock would not have any reason to have done what it just did these past few weeks. Or the many other wild swings it has had in the past few years. The GME investors have been predicting these sorts of moves, but their critics have not, which suggests that the investors maybe know something that the critics don't (or don't want to admit to). Retail investors simply don't have enough money to make those kinds of big fast moves in stock price and volume. Yet the stock continues to behave bizarrely, with huge volatility.
For instance, after basically every positive earnings report, or good news reported from the company, the stock price drops suddenly. Ask why. Who has means, motive, and opportunity to do such a thing? People in this thread have been posting about "pump and dump" schemes, but "short and distort" schemes are every bit as real, if less well known.
GME was around $10 per share frequently for the past few months. Now it's suddenly over $30. If you had bought back then, you could have sold today for 200% profit. But you didn't. Because a bunch of free (as in beer) media provided "helpfully" to you by large corporations, as well as various anonymous posters, told you not to. It's worth asking yourself why you believed them and lost out on this potential profit. Why did you think they were working in your best interests? If the news they were giving you was so valuable, why were they giving it away to you for free?
Food for thought.
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Back in reality, they got wind of another short attempt. Shorting should be illegal, because IT IS ILLEGAL
Shorting is NOT ILLEGAL.
Naked shorting is illegal.
There is a big difference.
https://finance.yahoo.com/news... [yahoo.com]
All you need to know about how *** up (Score:3, Interesting)
This thing where we don't invest in companies and instead all compete to see who's going to get caught holding the bag should stop. It's bad for everyone except a few billionaires and an even smaller number of lottery winners.
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Post pandemic the economy runs on shenanigans. Best shenanigans wins, sucker.
Re: All you need to know about how *** up (Score:2)
Wait, which pandemic happened before 2008?
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Post pandemic the economy runs on shenanigans. Best shenanigans wins, sucker.
This shit's been going on a lot longer than the 2020 pandemic. You don't entrench this sort of nonsense in that short a period of time. This took centuries of work to build up into this house of financial cards. The 2008 crash didn't happen because the economy was built on something other than shenanigans. Quite the opposite. But hey, Washington and every government economic decision is based purely on the whims of Wall Street. Because money and bullshit equals more money. Even if the bullshit outweighs the
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Like they say: markets are irrational.
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The original quote was:
"Markets can remain irrational longer than you can remain solvent." - John Maynard Keynes
He had some other great ones too -
"Long run is a misleading guide to current affairs. In the long run we are all dead."
"If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out."
My personal favourite Keynes quote, that I remind myself before doing any trade:
"The markets are mov
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$DJT is a scam. Trump got the shares for free by lending his name to it. He can't lose - either it becomes a viable business, or he cashes out and leaves all his supporters who bought stock holding the bag. Either way, free money for Trump.
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It's not the first time he's pulled that trick.
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The alternative being that you tell us where we can and can't invest? No thanks.
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You're allowed to write fucked, no need to self censor.
Weird economic logic (Score:2)
> but with the help from meme stock investors, last March the company turned its first profit in two years.
Maybe I'm missing something, but how does a high share price help a company to make a profit?
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People bought shares, and shopped in store.
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By selling its shares when they're high, then buying them back when they dropped onto the floor.
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how does a high share price help a company to make a profit?
It allows the company to get loans at better rates. Re-financing existing loans can cause huge savings going forward, which results in higher profits (because of lower costs).
bitcoin (Score:2)