Nearly five years ago, Keith Gill publicly shared his investment of $53,000. This week, Gill's net worth has exceeded $289 million. This retail investor will influence the stock market trend by posting mysterious information online. On Monday night, he shared a screenshot of his investment portfolio, showing that he still holds five million shares of GameStop stocks and 120,000 call options even after a 21% increase. Only on Monday, his paper profit was as high as $79 million.$GameStop (GME.US)$This week, his net assets have exceeded $289 million, which is a significant increase from his $53,000 investment five years ago.
The gentleman who led the retail investors can affect the stock price by posting mysterious information online. On Monday night, he shared a screenshot of his investment portfolio, showing that even after a 21% increase, he still holds 5 million GameStop shares and 120,000 call options. Only on Monday, his paper profit was up to $79 million.
Gill's username on Reddit is 'DeepF----Value', 'Roaring Kitty' on YouTube and X. He began sharing his investment in GameStop in September 2019, and his $53,000 holdings have inspired a group of retail traders to squeeze the short-selling hedge funds. When this shocking event ended in April 2021, Gill exercised his call options and owned 200,000 common stocks.
When he resurfaced online three years later, his position size had grown significantly. Meanwhile, GameStop is still struggling to shift from physical video game sales to e-commerce, which is what Gill originally believed was a value investment.
"The most successful traders are the ones who play by their own rules. To trade like that, you have to be different," said Michael Khouw, co-founder and chief strategist at OpenInterest.PRO.
"You'll never see professional traders make that kind of money. Our risk managers would have gotten out long before things got to that point. That's just unimaginable," Khouw added.
However, Gill may run into some trouble. According to foreign media reports, Morgan Stanley's E-Trade broker is considering kicking him off the platform over concerns that his behavior may constitute market manipulation.
What's next?
Gill's last portfolio screenshot showed that he held 120,000 GameStop call options exercisable at a strike price of $20, which expire on June 21.
In other words, if the stock closes above $20 on that day, Gill can exercise at $20 per share, giving him another 12 million shares. This would make him the fourth-largest shareholder in GameStop, behind only Vanguard, BlackRock and Ryan Cohen's RC Ventures, with a nominal value of $240 million, according to FactSet data.
If exercised, these shares would be worth $240 million.
"Unless you have the money to hold the stock after exercising, you're just holding the options temporarily, intending to sell before they expire. The problem with holding such large positions is that other market participants can easily see these options or related stocks being sold, putting pressure on the stock," said CC Lagator, co-founder of Options AI.
$1 billion?
If Gill exercises, he will hold 17 million shares. At Monday's closing price of $28, these shares would be worth $476 million.
At GameStop's recent high of $64.83 on May 14, these shares were worth $1.1 billion. (He acquired the shares at a cost of $421.4 million in this way)
Gill can also extend these call options to a further expiration date to buy himself more time, meaning he would exit his current position and immediately enter a similar one. However, this could be an expensive choice.
"The problem is, every time he does this, he's wasting money on the new option premium," Lagator said.
On Tuesday, GameStop's stock price fell 5.36% to $26.5.
Edited by Jeffrey