Keith Gill — a Reddit user and YouTuber who goes by the name “Roaring Kitty” drove the GameStop (NASDAQ: GME) to its highest level in January. The Reddit trader led the Wall Street Bets Reddit group to bring the GameStop stock to $486 per share. However, the GME rally was disrupted by a severe correction that caused heavy losses to traders involved in the GameStop frenzy.
Keith Gill caused a polemic in Wall Street
In 2019, Gill or Roaring Kitty invested $53,000 in the video-game retailer GameStop. At that time, the GameStop stock was trading at $4. However, Gill found one of the smartest ways to turn his $53,000 investment to a thrilling $48 million in 2 years.
The 34-years old trader was a financial educator for an insurance firm in Massachusetts. But after Gill quit his 9-5 job, he turned to the Reddit group WallStreetBets and started giving financial advice through his YouTube channel. He quickly amassed a large following that would later allow him to craft one of the weirdest Wall Street stories.
WallStreetBets against Wall Street hedge funds
Reddit group WallStreetBets started a battle between short-sellers (hedge funds) and bulls (amateur Reddit traders). The Reddit traders heavily invested in the GameStop stock, counter-attacking hedge funds that made a bet against and resulting in heavy losses to popular hedge funds such as Mudrick Capital Management that had been shorting GameStop.
Consequently, the Reddit group shocked the Wall Street giants who have long manipulated the stock market. Nevertheless, Robinhood — U.S. based trading platform suddenly imposed restrictions on trading in GameStop and AMC shares while the stocks were leading a rally. Shortly afterward, the GME stock plunged 40% and resulted in heavy losses to bulls.
In return, several app users launched a 1-star rating campaign on Google Play Store against Robinhood. Moreover, traders filed lawsuits against the company for advantaging hedge funds over WallStreetBets traders.
However, Gill highly profited from the GameStop Frenzy. He published a Reddit picture on Friday that showed his GME holdings standing at $48 million in value. The GameStop stock closed at $325 on the same day.
Reddit CEO, Robinhood CEO, and Keith Gill to testify in hearing
The WallStreetBets vs Wall Street titans raised many questions on the future of the stock market. Therefore, the House of Financial Services Committee scheduled a hearing with Reddit CEO Steve Huffman, Robinhood CEO Vlad Tenev, and Keith Gill.
The hearing will stream online on this website and will discuss the recent volatility in shares of GameStop and AMC. The House hearing goes by the name: “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide.”
In conclusion, the Senate Committee of Banking is also planning to hold a hearing into the “current state of the stock market.”