Finance
How Roaring Kitty’s net worth went from $53,000 to nearly $300 million — and could one day cross the $1 billion mark
Pavlo Gonchar | SOPA images | Light rocket | Getty Images
Almost five years ago, GameStop champion Keith Gill revealed a $53,000 bet at his favorite video game store. Fast forward to this week, and his net worth has risen to over $289 million.
The meme stock leader, who can move stocks simply by posting cryptic messages online, shared a screenshot of his portfolio on Monday evening, showing that he held on to his 5 million shares of GameStop and 120,000 call options even after a 21% rally.
He made a whopping $79 million on paper in one trading day on Monday.
Gill, whose handle is “DeepF ——Value” on Reddit and “Roaring Kitty” on YouTube and to go short. hedge fund sales. By the end of the breathtaking episode in April 2021, Gill exercised his call option position to own a total of 200,000 shares of common stock.
The size of his positions increased dramatically when he resurfaced online three years later. Meanwhile, GameStop, a stock he originally bought thinking it was a big value bet, is still struggling with the shift from physical video game purchases to e-commerce.
“The most successful players are the ones who are just crazy. You have to be something else to trade that way,” says Michael Khouw, co-founder and chief strategist of OpenInterest.PRO.
“You would never see a professional trader making these kinds of numbers,” Khouw added. “Most of our risk managers would have gone this way before you ever had something like that lying around. It’s just unbelievable.’
However, Gill could be in trouble. The Wall Street Journal reported that Morgan Stanley’s E-Trade broker was considering booting him because he feared what he was doing amounted to market manipulation.
CNBC was unable to verify what Gill shared about his GameStop stake and portfolio.
Next steps?
The last screenshot of Gill’s portfolio showed 120,000 call options against GameStop with a strike price of $20, expiring on June 21.
Put another way, if the shares close above $20 that day, Gill could exercise the options for $20 each, which would give him an ownership of an additional 12 million shares. A total of 17 million shares would make him GameStop’s fourth-largest shareholder, behind Vanguard, BlackRock and Ryan Cohen’s RC Ventures, according to FactSet.
The par value, if exercised, would be $240 million worth of shares purchased for $20.
“Unless you have the money to hold the shares after exercising the calls, you just rent them on the assumption you’ll sell them, or sell shares against them before they expire,” says CC Lagator, co-founder of brokerage Options . AI. “The problem with a position of that size is that it would be very clear to other market participants that those calls or shares versus those calls were being sold, which put a lot of pressure on the stock.”
$1 billion?
If Gill were to ultimately exercise the calls, he would be left with 17 million shares. At Monday’s close, $28, the stake would be worth $476 million.
At GameStop’s recent peak of $64.83 on May 14, it would be worth $1.1 billion. (His cost of acquiring such a stake in this way would be $421.4 million.)
Gill could also roll those call options to a further expiration date to buy some time, meaning he exits the current position and immediately enters a similar position. However, that can be a costly option.
“The problem with that is every time he does that he’s going to waste money on new option premiums,” Lagator said.
Shares of GameStop fell about 2% on Tuesday.
