Keith Gill, the Reddit trader who led the GameStop (NASDAQ: GME) rally just lost $13 million on Tuesday, as GME shares plummeted. The Redditor who goes by the name “Roaring Kitty” or “DeepF***ingValue” — led the WallStreetBets Reddit group campaign — pushing GME stock to $483.
However, Gill revealed on YouTube and in a post on WallStreetBets that his GME holdings value plunged to $7.6 million. The mastermind behind the GME rally had $21 million in previous days and over $50 million last week when GME was trading at $483. Nevertheless, GameStop lost 80% of its value when the short-squeeze effect faded, resulting in $30 billion losses to traders.
In 2019, Gill bought shares of GameStop when the stock was traded for $4 a share, while options to buy cost were $50,000. That being said, other traders who only bought GME this month when it was leading the rally probably couldn’t make much profit.
Hedge funds might have a hand in GME rally
Furthermore, shares of other stocks that were soaring last week saw a significant decrease. Movie theater chain AMC Entertainment plunged 40% on Tuesday. On the other hand, Blackberry —the Canada-based multinational company’s shares was $28 last week. However, after the short-squeeze effect faded, the stock downturned to $12 on Wednesday.
Some analysts suggest that hedge funds had a hand in moving the stock market. According to a Bloomberg report, Mudrick Capital —a $3 billion hedge fund made a $200 million bet against AMC and GME last month. However, it was reported that several hedge funds including Mudrick that had been shorting or betting against GME and other shares had actually contributed to the surge of those companies’ shares.
Meanwhile, WallStreetBets Reddit group reported that bots are storming the Reddit board. According to CBS MoneyWatch report, the group moderators noticed a “large amount” of bot activity in the stock-recommendation section. The group moderators alleged the attackers of trying to mislead group members.
U.S. Treasury secretary Janet Yellen will meet top regulators this week to discuss the volatile trading in GameStop. Additionally, Yellen will discuss with other regulators the “meme stock” companies and also the price of silver.