How did a retail KOL beat the Wall Street shorts and make $40 million?

Written by: TechFlow

Roaring Kitty, one of the most powerful retail traders in history, turned $53,000 into more than $46 million on $GME. After three years of seclusion, he is back and has led a new round of MEME craze. Whether it is US stocks or cryptocurrencies, $GME has re-started the moon landing mode. This is his story and inspiration.

Roaring Kitty, whose real name is Keith Gill, was born in 1986. His family is not rich, nor did he graduate from a prestigious school. In college, he was a track and field star. After graduating in 2009, he first worked for a startup company that made stock analysis software at his relative's home. After several job changes, he started working for MassMutual in 2019.

In 2014, he created his own Twitter account with the goal of "finding stocks and seizing investment opportunities." In 2015, he also joined YouTube, regularly broadcasting live to show his transactions and market research. He also joined Reddit in 2019 with the username DFV (DeepFuckingValue).

In today's popular terms, Keith Gill is a US stock KOL.

The turning point of the legendary story occurred in 2019, when Gill began to buy GME shares, allegedly because he felt that GME's shares were severely undervalued.

At the time, Wall Street tycoon Michael Burry was also optimistic about GME. He was the prototype of the protagonist of "The Big Short". He single-handedly fought against Wall Street, shorted US real estate subprime bonds and made a fortune. But later everyone knew that Burry had cleared his position before GME stock went crazy (in the fourth quarter of 20).

Initially, Gill bought about $53,000 worth of GME at a price of $5, and then began to announce his holdings on the WallstreetBets sub-forum of the Reddit forum, and promoted it on YouTube and Twitter, live-streaming his investment portfolio and investment strategy.

At that time, GameStop was still a "rotten company" in deep financial trouble: the loss in the quarter exceeded 80 million US dollars, and sales fell 25% year-on-year. Even layoffs and store closures did not help.

Someone left a message under his post: "Brother, what made you invest $53,000 in GameStop?" Gill said that he always believed in the future potential of this company.

In July 2020, Gill made a discovery that could change his fate: the number of shorted shares of GME was 150% of the outstanding shares.

Generally speaking, to short stocks, institutions have to borrow stocks and sell them, and then buy back the stocks on a specified date. If the stock price falls, hedge funds can "sell high and buy low" to earn the difference. But if the stock price rises, the short sellers will have to buy back the stocks, which may push up the stock price and cause a "short squeeze". Players who hold these stocks can earn profits in return.

Gill discovered the opportunity. Short sellers may be at risk of short squeeze, and there is a chance to make money by going long.

He also posted this discovery on the WSB section and called on netizens to participate. For Reddit users, GameStop also has a special meaning: it was where many people bought games in their childhood.

Their biggest opponent is Melcin Capital, a hedge fund known for short selling.

In January 2021, the famous e-commerce company Chewy announced its investment in GME, and co-founder Ryan Cohen joined the GME board of directors. Under the favorable stimulus, more and more retail investors flocked to buy GME stocks, and the stock price rose by up to 50% in a single day, and the monthly increase was close to 700%.

Melcin Capital could no longer bear the sharp rise in prices. The legendary short-selling fund Citron provided assistance, injected capital into Melcin Capital, and announced that it would short sell together...

Wall Street's counterattack further aroused the resistance of retail investors. This was also a war. The slogan on WSB was loud: short sellers must die!

On January 27, Melcin Capital announced that it would close its positions and give up short selling. In one month, its asset size evaporated by more than 50%, with a loss of up to 6.8 billion US dollars, and it became the hedge fund with the craziest net value drawdown after the 2008 financial crisis.

So far, retail investors have won a staged victory, but suddenly Robinhood, a trading platform commonly used by retail investors, announced restrictions on trading, retail investors could not buy GME stocks, and the stock price fell.

This is seen as Wall Street starting to cheat and not abide by the rules. The GME long-short war gradually evolved into a struggle between Wall Street and retail investors, a struggle between two classes.

In this process, Gill was regarded as a leader. Although everyone later discovered that GME was not simply a force of retail investors, GIill, who was pushed to the forefront by the times, has become a banner and a leader of the retail movement. He has also gained the biggest pot of gold in his life.

In 2019, $5 was used to build a position in $GME; in 2021, $GME reached a peak of $483. In January 2021, Gill posted a screenshot of his performance on WSB, showing that his GME stock and options had a combined profit of more than $31.47 million, with a cumulative position of $46 million.

This legend is enough to become a lifetime of "bragging" material.

This is the story of the U.S. stock market in the past. Does the current crypto world look familiar?

A large number of VC coins have poured into the market, and retail investors have become the exit liquidity of VCs, so it has become an unspoken rule not to take over each other's orders. Not buying VC coins is like the collective short squeeze of WSB retail investors a few years ago, which is a class resistance.

Retail investors turned their attention to MEME, and MEME KOLs such as Ansem rose in this cycle. His contribution to the "MLM" of $WIF is obvious to all.

Just as $GME has the support of financial giants, but the times and cycles still chose Gill as the spokesperson, $WIF also chose Ansem as the spokesperson, and the two complement each other.

In the market where MEME is the mainstream, powerful KOLs (or influencers) have the ability to influence the market. Whether it is Musk, Keith 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, stir up the market, and create a new world.

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