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About five years ago, game station Champion Keith Gill revealed he bet $53,000 on his favorite video game retailer. This week, Jill’s net worth exceeded $289 million.
The meme stock leader, who can change stock trends simply by posting cryptic messages online, shared a screenshot of his portfolio on Monday night, showing he still holds 5 million shares of GameStop even after the stock rose 21% stock and 120,000 call options. On Monday – a trading day – he had a whopping $79 million in earnings on his books.
Gil, who goes by “DeepF——Value” on Reddit and “Roaring Kitty” on YouTube and X, began sharing his GameStop position in September 2019, holding a $53,000 stake , encouraging a group of retail traders to squeeze shorts – selling hedge funds. By the end of the jaw-dropping episode in April 2021, Gill had exercised his call option position and received 200,000 shares of common stock.
When he reappeared online three years later, the size of his site had grown dramatically. Meanwhile, he originally bought GameStop stock because he thought it was a high-value investment, but the company is still struggling to shift from physical video game purchases to e-commerce.
“The most successful players are the crazy ones,” said Michael Khouw, co-founder and chief strategist at OpenInterest.PRO. “You have to have something special to do a trade like this.”
“You would never see professional traders come up with numbers like this,” Ku added. “That’s the approach most of our risk managers would take before a move like this. It’s just unimaginable.”
Jill may be in some trouble, though. The Wall Street Journal reports that Morgan Stanley’s electronic trading broker is considering firing him over concerns that his behavior could amount to market manipulation.
CNBC was unable to verify the information Gill shared about his GameStop holdings and investment portfolio.
Next step?
The last screenshot of Gill’s portfolio shows 120,000 call options on GameStop with a $20 strike price expiring on June 21.
In other words: If the stock closes above $20 that day, Gill can exercise the option at $20 per share, giving him 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.
If exercised, the notional value would be $240 million worth of shares purchased at $20.
“Unless you have the money to take custody of the stock after exercising the calls, you’re just renting them with the assumption of selling them, or selling stock against them before they expire,” said CC Lagator, co-founder of brokerage Options Artificial Intelligence. “The problem with a position of this size is that it is obvious to other market participants that these calls or stocks versus these calls are being sold, which puts a lot of pressure on the stock.”
$1 billion?
If Gill exercises his subscription rights, he will own 17 million shares. At Monday’s closing price of $28, the stock is worth $476 million.
Based on GameStop’s recent peak of $64.83 on May 14, the value would be $1.1 billion. (The cost to him of acquiring such shares this way was $421.4 million.)
Gill can also roll these calls to further expirations to buy some time, which means exiting the current position and entering a similar position immediately. However, this can be a costly option.
“The problem is that every time he does this he wastes money on new option premiums,” Lagat said.
GameStop shares fell about 2% on Tuesday.
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