- The U.S. state of Massachusetts is currently investigating Keith Gill, a well-known figure in the meme stock community, famously known online as Roaring Kitty or DeepFuckingValue.
- Gill, who became synonymous with the 2021 retail-driven surge in GameStop shares, has recently revived interest in the company by returning to social media platforms like Twitter and Reddit.
- According to the Wall Street Journal and Reuters, both Massachusetts state regulators and the Securities and Exchange Commission (SEC) are scrutinizing his recent trading activities.
Keith Gill’s return to social media has sparked renewed interest in GameStop, but it has also caught the attention of regulatory bodies concerned about potential market manipulation.
Regulatory Scrutiny Intensifies on Keith Gill’s Trading Activities
The Massachusetts Securities Division has confirmed an investigation into Keith Gill, known online for his role in the GameStop short squeeze that captivated the financial world in early 2021. This probe, first reported by the Wall Street Journal and later confirmed by Reuters, comes as Gill shifts his online activity predominantly to Reddit. The Secretary of the Commonwealth for Massachusetts has yet to publicly comment on the ongoing review.
Rekindled Retail Investor Interest
Despite not addressing GameStop directly in his recent activity, Gill has been posting curated clips and engaging with the retail investment community on Reddit. On one notable occasion, he shared a screenshot of an ETrade account holding an impressive $210 million in GameStop shares and call options, attracting significant attention and speculation from investors. Within days, this amount had reportedly increased by millions, generating substantial online buzz and drawing in over 12,000 users to the Reddit community r/Superstonk.
Implications of Publicized Holdings
The viral nature of Keith Gill’s posts on Reddit has raised concerns about market manipulation. ETrade, his retail trading platform, is reportedly contemplating dropping him due to these concerns. However, there are mixed reactions in the financial community. Bobby Goodlatte, co-founder of Form Capital, has publicly defended Gill, comparing his actions to stock picks shared on television shows like CNBC’s “Mad Money” by Jim Cramer.
Historical Context of Regulatory Actions
This isn’t the first time Gill has faced regulatory scrutiny. In 2021, he was a registered broker with a MassMutual subsidiary, and the insurer ended up paying a $4 million fine for inadequately supervising his trading and social media activities. This background adds another layer of complexity to the current investigation.
Impact on GameStop’s Stock
Following the renewed attention from Gill’s social media posts, GameStop’s stock initially surged but experienced a sharp decline soon after. The stock fell by 5% to $26.50 on Tuesday, following a dramatic 30% drop the day before. Despite these fluctuations, GameStop’s stock price has risen by 62% over the past month, driven by renewed interest from retail traders.
Community Reactions and Future Outlook
The financial community remains divided on Gill’s influence and actions. Jim Cramer also weighed in, noting that buying calls and showing them isn’t illegal, but emphasizing that regulators are closely watching for eventual sales. This ongoing debate underscores the fine line between market influence and manipulation.
Conclusion
As Keith Gill continues to captivate the retail investment community, the regulatory scrutiny highlights the intricate balance between market influence and market manipulation. The ongoing investigations could set precedents for how social media activities by influential traders are monitored and regulated in the future. Amidst volatile stock performances, the story of Roaring Kitty and GameStop continues to be a captivating saga for both retail investors and regulators alike.
