This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Ever since Keith Gill, who goes by the moniker Roaring Kitty on Reddit, emerged from his deep slumber to rouse a devoted army of retail traders, common investors and analysts alike have been mulling over what the OG meme stock veteran intends to accomplish: is this simply a glorified personal enrichment scheme, or is there a deeper undercurrent?
For the record, I don't think anything Kitty did was illegal. However, I believe he and his associates overstate their importance in the market and overlook that the market dynamics and structure of $GME have changed since January 2021.
Back then, he bought the stock at $2 when…
— Citron Research (@CitronResearch) June 4, 2024
Citron Research has very clearly articulated the changed circumstances of the ongoing meme stock mania 2.0: GameStop no longer has a sky-high short interest, and the company has miserably failed to revive its fortunes despite receiving billions of dollars in retail funding.
Yet, there might be a method to this madness. Before going further, let's recap Roaring Kitty's recent major moves. On late Sunday night, Gill revealed that he now owned 5 million physical GameStop shares, and retained control over an additional 12 million shares through his 120,000 call options on the stock. This stake of 17 million shares equates to around 5.57 percent ownership in GameStop, based on the company's 305.30 million shares outstanding.
Further explanation:
RK can sell his option contracts for a stellar profit, or if wants to exercise his call options, he can purchase 12 million shares of GME at $20 per share.In order to exercise those 120,000 call options he needs $240,000,000 to buy the 12 million shares.…
— JHouse (@JHouse70678375) June 6, 2024
Now, some people think that Roaring Kitty is trying to push GameStop's share price to the $42.20 level. At this price, Gill can sell his 5 million physical shares to raise $240 million, which is the exact amount required to exercise his 12 million call options at $20 per share. Doing so would theoretically compel market makers to locate 12 million shares on the open market. With GameStop's retail army continuing to HODL, this setup would, in theory, pave the way for the stock's price to violently adjust upward.
Of course, this might just be the musings of Roaring Kitty's devoted followers trying to justify his actions after the fact. Or, this might indeed be his game plan all along. We will likely get to know a lot more on Gill's intentions in the run up to the 21st of June, when his calls are slated to expire.
Meanwhile, Roaring Kitty's moves are attracting the attention of market makers and regulators. We reported recently that Morgan Stanley-backed E*TRADE brokerage platform was considering a ban on Keith Gill.
The SEC has also said they are looking into the options trading around $GME, GameStop as well.
Read more: https://t.co/80BIyx4LlG
— unusual_whales (@unusual_whales) June 6, 2024
Meanwhile, Massachusetts's securities regulator is already probing Roaring Kitty's activities. Also, the SEC Chair Gary Gensler has implied in a recent interview that the SEC might also be investigating Gill's GameStop-related moves.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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