This article reviews the history of the “GameStop Short Squeeze Event” and retells the story of Keith Gill, the mastermind behind this epic event. Keith Gill’s story is not only inspiring but also sheds light on the current state of the cryptocurrency market.
Roaring Kitty, one of the greatest individual retail traders in history, turned $53,000 into over $46 million on $GME. After disappearing for three years, he made a comeback and sparked a new wave of meme frenzy, both in the stock market and the cryptocurrency market. $GME has once again entered moon mode. This is his story and revelation.
Roaring Kitty, whose real name is Keith Gill, was born in 1986. He did not come from a wealthy or prestigious background. In college, he was a track star. After graduating in 2009, he worked for a startup company owned by his relatives that developed stock analysis software. He switched jobs a few times before starting to work for MassMutual, a Massachusetts-based life insurance company, in 2019.
In 2014, he established his own Twitter account with the goal of finding stocks and seizing investment opportunities. In 2015, he also joined YouTube, regularly livestreaming to showcase his trades and market research. In 2019, he joined Reddit under the username DFV (DeepFuckingValue).
In today’s terms, Keith Gill is a Key Opinion Leader (KOL) in the stock market.
The Legend Begins
The turning point of this legendary story happened in 2019 when Gill started buying shares of GME. It is said that he believed the stock was severely undervalued. At that time, another Wall Street figure, Michael Burry, who was the prototype of “The Big Short,” also had a bullish view on GME. Burry gained fame for single-handedly going against Wall Street and making a fortune by shorting subprime mortgage-backed securities during the 2008 financial crisis. However, it was later revealed that Burry had liquidated his GME position before the stock went crazy (in the fourth quarter of 2020).
Initially, Gill purchased around $53,000 worth of GME shares at a price of $5 per share. He then started disclosing his holdings on the WallstreetBets subreddit on Reddit and promoted them extensively on YouTube and Twitter, livestreaming about his investment portfolio and strategies.
At that time, GameStop was still considered a “failing company” stuck in a financial quagmire, with a quarterly loss of over $80 million and a 25% decline in sales. Even layoffs and store closures did not help.
Someone commented on his post, saying:
Gill stated that he always believed in the future potential of the company. In July 2020, Gill made a life-changing discovery: the short interest in GME exceeded 150% of the float.
Generally, when shorting a stock, institutions borrow shares and sell them, then buy them back on a specified date to return. If the stock price falls, the hedge funds can profit from the price difference by “selling high and buying low.” However, if the stock price rises, the short sellers have to buy back the shares, which may push the stock price higher, resulting in a “short squeeze.” Players holding these stocks can then profit from the situation.
Gill saw the opportunity that the short sellers might face a short squeeze risk, while going long had the potential to make money. He shared this discovery on the WSB subreddit and called on fellow Reddit users to participate. For Reddit users, GameStop also held special significance as it had been a place where many people bought games in their childhood.
Their biggest opponent was Melvin Capital, a famous hedge fund known for short selling.
In January 2021, the renowned e-commerce company Chewy announced its investment in GME, and Ryan Cohen, one of the co-founders of Chewy, joined the GME board. This positive news attracted more and more retail investors to buy GME shares, causing the stock price to increase by up to 50% in a single day and nearly 700% in a month.
Under the pressure of the sharp rise, Melvin Capital was on the verge of collapse. The legendary short-selling fund Citadel provided assistance by injecting capital into Melvin Capital and announcing a joint short position…
Retail Investors Join the Battle Against Short Sellers
Wall Street’s counterattack further fueled the resistance of retail investors. This has become a war, and the rallying cry on WSB was loud and clear: “Short sellers must die!”
On January 27th, Melvin Capital announced that it was closing its short positions and giving up on short selling. Its assets shrank by over 50% in a month, with losses amounting to $6.8 billion, making it the most insane hedge fund drawdown since the 2008 financial crisis.
At this point, retail investors achieved a temporary victory. However, the popular trading platform Robinhood suddenly announced restrictions on trading, preventing retail investors from buying GME shares, and the stock price subsequently plummeted.
This was seen as Wall Street’s attempt to manipulate the market and disregard the rules. The battle between longs and shorts in GME gradually evolved into a battle between Wall Street and retail investors, a class struggle.
Throughout this process, Gill was seen as a leader. Although later it was discovered that the force behind GME was not solely retail investors, Gill became the face of the movement and the leader of the retail investor movement, earning himself a huge fortune.
From building a $GME position at $5 per share in 2019 to reaching a peak of $483 per share in 2021, Gill’s screenshot of his performance on WSB in January 2021 showed that his total earnings from GME shares and options exceeded $31.47 million, with a total holding value of $46 million.
This legendary story is enough to be a lifetime bragging material.
This was the story of the stock market in the past, and now in the world of cryptocurrency, does it feel familiar?
A large influx of venture capital (VC) coins into the market has turned retail investors into an exit liquidity for VCs. Therefore, not buying VC coins has become an unspoken rule, just like the collective short squeeze by WSB retail investors a few years ago. It is a form of class resistance.
Retail investors have shifted their attention to MEME coins, with MEME KOLs like Ansem rising in this cycle. His contribution to the “pyramid scheme” of $WIF is evident.
Just as there were financial giants behind $GME, Gill was still chosen by the times and the cycle to be the spokesperson. Similarly, $WIF chose Ansem as its spokesperson. Both complement each other.
In a market dominated by memes, powerful KOLs (or influencers) have the ability to influence the market. Whether it’s Musk, Gill, or Ansem, they are all superstars in the MEME cycle.
Content and influence are leverage, and retail investors still have the opportunity to become super KOLs, stirring up the market and creating new territories.
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