The Reddit stock trader who launched an insurrection against hedge funds trying to short GameStop (NYSE:GME) into oblivion is serious when he says he’s bullish on the video game retailer.
The Wall Street Journal reported last week that Keith Gill — known as Roaring Kitty on his YouTube channel — doubled his stake in GameStop to 100,000 shares for a position that was worth $4 million.
The mouse that roared
Gill got the short-squeeze ball rolling last month after posting his bullish take on the video game retailer and noting hedge funds had overplayed their hand and shorted more stock than there was available to trade.
It quickly became clear that small retail investors acting in concert to buy GameStop shares and options could cause the stock price to rise. In doing so, short-sellers would start covering their positions, leading to further increases in the share price.
What Gill perhaps didn’t realize was that a torrent of pent-up emotion would be unleashed in the process, and not only would GameStop be caught in a “gamma squeeze,” but that other heavily shorted stocks would get sucked into the vortex.
AMC Entertainment (NYSE:AMC), Bed Bath & Beyond (NASDAQ:BBBY), and Nokia (NYSE:NOK) were among the companies that saw their stock prices soar hundreds if not thousands of a percent higher in the course of just a few days.
Gill was called to testify before Congress on his actions that precipitated the stock trading frenzy, along with the heads of hedge funds and the Robinhood online trading app. Gill testified essentially that he liked GameStop’s stock, and he has apparently backed up that sentiment with money, purchasing an additional 50,000 shares.
GameStop stock was up over 7% in midday trading Monday, which would have added approximately another $290,000 in value to Gill’s position.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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