Source: Caixin.
Surrounding GameStop, various powers in the US stock market fiercely fought, the scene was as lively as a martial arts competition: on one side were the retail investors with Keith Gill as their leader, and on the other side were the Wall Street shortsellers like Citron Research; brokerage trading platforms and the US SEC also got involved and may ban the trading accounts of the "ringleaders"; even famous Chinese investor Duan Yongping joined in the fray.
A passionate battle between US stock retail investors and Wall Street short sellers was once again played out last night.
On Sunday (June 2), Keith Gill, a US stock retail investor who goes by the online name 'Roaring Kitty', made his first Reddit post in three years, sharing his purchasing record of GameStop stock worth $115.7 million.$GameStop (GME.US)$Following this, the large-scale battle surrounding GameStop was reignited, and the long-short duel that shocked Wall Street three years ago resumed.
On Monday, local time in the United States, a fierce battle broke out among various parties over GameStop, as Keith Gill led the retail investors in the long position, while Wall Street short seller Citron Research represented the institutional investors.
In addition, brokerage trading platforms and the US Securities and Exchange Commission (SEC) represented regulatory forces, putting 'Roaring Kitty's' trading account at risk of being banned; even well-known Chinese investor Du Yongping joined in the excitement.
'Roaring Kitty' led the retail investors in a passionate charge.
Last month, Roaring Kitty, the US stock retail investor, returned to social media and hinted at his comeback with a meme. On Sunday, he posted a screenshot of his delivery note, which showed that he had bought 5 million shares of GameStop stock at a price of $21.27 per share, worth a total of $115.7 million, on his Reddit account 'DeepF-Value'.
The screenshot shows that in addition to the stock purchase, he also bought 120,000 call options with an exercise price of $20 and an expiration date of June 21, which were worth about $65.7 million in total.
This screenshot caused GameStop's stock price to soar before the market opened on Monday, with an initial spike of 70%. However, just a few minutes after the market opened, GameStop's stock price plummeted, and the final closing price was only up 21%.
Despite this, after the market closed on Monday, Keith Gill once again updated his position on Reddit. The screenshot shows that in his position, GameStop's stock price rose 21% in a single day, and the call options rose 82%, earning him $78.6 million in just one day.
His post received tens of thousands of likes and thousands of comments from retail investors who, after seeing his trading record, exclaimed passionately: 'Who cares, I'm going to add more positions tomorrow!'
Short sellers strike again.
While 'Roaring Kitty' led the retail investor charge, Wall Street's 'short sellers' were not idle. According to financial data provider S3 Partners, short sellers of GameStop suffered heavy losses in May, losing about $1.4 billion.
Among these 'short sellers', we can once again see the familiar figure of Citron Research, a well-known short selling institution.
In January 2021, due to the surge in retail investors' short squeeze, Citron was forced to liquidate its short position in GameStop, losing more than $100 million.
In January 2021, due to the frenzy of retail investors, GameStop skyrocketed, and Citron was once forced to cover its GameStop short position at a loss of over $100 million.
In May of this year, after 'Big Brother' announced his return on May 13th, GameStop surged 74.4% on the 14th and 60% on the 15th, but then reversed its upward trend and fell 18.8% on the 16th, followed by two consecutive days of decline. It was on the day when the trend of the stock price of GameStop reversed on the 16th that Citron announced that it was shorting GameStop again.
On Monday this week, after Keith Gill showed his delivery note and drove up the stock price of GameStop, Andrew Left, founder of Citron Research, announced that he was shorting the stock again on the same day.
In an interview, Left said, 'I have covered my short position in May and have shorted it again today.' He also pointed out that the short position this time is smaller than his previous one, but did not disclose its size. He also specifically mentioned Keith Gill's behavior of showing delivery notes on Reddit, stating, 'When I saw this, I shorted it.' He also added that Keith Gill 'may be a hedge fund manager.'
'I have covered my short position in May and have shorted it again today.'
He also pointed out that the short position this time is smaller than his previous one, but did not disclose its size.
He also specifically mentioned Keith Gill's behavior of showing delivery notes on Reddit, stating, 'When I saw this, I shorted it.' He also added that Keith Gill 'may be a hedge fund manager.'
"When I saw this, I went short," he added that Keith Gill "may be a hedge fund manager."
In addition to the showdown between 'Big Brother' and Wall Street shorts, trading platforms and regulatory agencies have also joined in, making the situation even more chaotic.
According to reports, E-Trade, an online brokerage owned by Morgan Stanley, is discussing banning Keith Gill's account. The reason is that he may be involved in potential market manipulation, but E-Trade has not made a formal decision.
It is reported that Morgan Stanley's global financial crimes unit and external lawyers have discussed whether to cancel Gill's account and found that after Gill bought call options on GameStop last month, he posted on social media, causing GameStop's stock price to skyrocket. And some of the options contracts he bought had expired at that time, meaning Gill had already made a profit.
At the same time, Morgan Stanley is also weighing the risks, because if Keith Gill's account is banned, it may provoke strong opposition from his large number of followers.
In addition, the US Securities and Exchange Commission is also reviewing Gill's trading of GameStop call options during his posting on social media, considering the possibility of manipulation.
In addition, the US Securities and Exchange Commission is also reviewing Gill's trading of call options for game stop during his social media posts, considering the possibility of manipulative behavior.
Duan Yongping, a well-known domestic investor, also joined in the fun. Duan Yongping revealed in a picture that he sold call options with an exercise price of up to 100 for GME, with a deadline of January 17, 2025.
Considering that the stock price of GameStop was only $28 after Monday's market close, Duan Yongping's bearish operation seems to be more of a 'play' nature in terms of the exercise price of his options.
Unless this round of GameStop's crazy rise can continue until early next year and the stock price soars above $100, Duan Yongping may not exercise his options. GameStop needs to reach about $105 or higher for Duan Yongping to suffer losses.
Unless the crazy rise of the game stop stock can continue until early next year and the stock price soars above $100, Duan Yongping may not exercise the option. Duan Yongping will only lose money if the game stop reaches about $105.
Editor/tolk