E*Trade reportedly weighs ban on ‘Roaring Kitty’ after meme trader reveals $116M GameStop bet
E*Trade is reportedly considering a ban on “Roaring Kitty” after the famed meme stock trader once again sent GameStop shares surging dramatically on Monday, according to a report.
Shortly before he sparked a renewed trading frenzy in GameStop shares last month, “Roaring Kitty,” whose legal name is Keith Gill, bought a “large volume” of GameStop options on E*Trade, The Wall Street Journal reported on Monday, citing unnamed sources.
This past weekend, Gill posted a screenshot of his account showing that he owns $116 million worth of GameStop stock as well a new trove of options that expire later this month. His total gains on the position stood at $6.86 million, according to the screen shot.
Gill, who is known on Reddit as “DeepF–kingValue” and who goes by “Roaring Kitty” on X and YouTube, sent GameStop shares soaring 75% in early trading Monday with his latest post. The shares closed 21% higher.
The wild moves have sparked market manipulation concerns at E*Trade, according to the Journal, with executives at the Morgan Stanley-owned day-trading platform concerned at the outsize power Gill can wield over markets for his own benefit, according to the report.
Nevertheless, company executives are caught in a “debate” about whether to clamp down on Gill — and “whether or not the firm is willing to risk drawing the attention of his meme army by removing him,” the paper reported, citing unnamed sources
On Monday, Gill took to Reddit and authored a post from his official account for the first time in three years.
The Reddit post was a repeat from 2021, when screenshots of his bullish GameStop trades triggered a rush of demand for “meme stocks” – often companies with weak fundamentals that gained a cult-like following through social media hype.
Unlike in 2021, however, Gill declined to post the item in the “WallStreetBets” chatroom where he posted his trade updates during the GameStop craze.
The screenshot posted on Sunday showed a GameStop holding of 5 million, or 1.8% of its publicly available stock.
Gill’s last post from April 2021, titled “final update,” showed a holding of 200,000 GameStop shares worth $30.9 million.
It also showed $65.7 million worth of GameStop call options, typically bought to express a bullish view, expiring on June 21 at a strike price of $20.
The stock closed at $23.14 on Friday, up about 33% since Gill began sharing cryptic posts and memes from his “Roaring Kitty” account on X.com in May, sparking speculation over whether he would resume sharing his trades online after the hiatus.
After surging as high as $40.50 in early trading on Monday, GameStop shares lost more than half of their gains. The stock on mid-afternoon Monday was recently changing hands at $29.93, up 29%.
It’s unclear whether Gill is behind the latest post. There has been speculation online that he sold his X account to a conceptual artist.
Gill’s popular YouTube channel, which boasts more than 676,000 subscribers, has been dormant for the last three years.
Last month, Gill posted a popular meme that shows a man leaning forward in his chair while holding a video game controller.
The meme, which was viewed tens of millions of times and generated hundreds of thousands of likes, sparked speculation that Gill, who had not posted anything online in years, was returning to the public eye.
GameStop, which is based in Grapevine, Texas, logged its highest trading volume in three years, surging by as much as 400%, thanks to the meme — but the rally fizzled shortly afterward.
Renaissance Technologies, one of the top hedge funds in the world which was founded by legendary investor Jim Simons, bought more than 1 million shares of GameStop a few weeks before the rally.
The meme stock craze caught the attention of independent presidential candidate Robert F. Kennedy, Jr, who in late May said he purchased $24,000 in GameStop shares as a show of solidarity with the “Apes” — the term used to refer to retail stock traders.
“Keith Gill is putting his money where his tweets are, and some investors are clearly following his lead and rekindling interest in meme stocks,” said Ben Laidler, global markets strategist at digital brokerage eToro.
GameStop was trending No. 1 on investor-focused social media platform stockstwits.com, indicating increased chatter among individual traders, while fellow meme stock AMC added 26%.
Tupperware, SunPower Corp and US-listed shares of BlackBerry rose between 6% and 13%.
Monday’s surge also put GameStop short sellers on track to rack up nearly $1 billion in paper losses, according to data and analytics firm Ortex Technologies.
GameStop has been grappling with slowing sales as its core business of selling new and preowned video game disks takes a hit from consumers moving to downloading games digitally or streaming.
The Post has sought comment from the operator of the Reddit account.
With Post Wires
