Keith Gill's return has done more than just shake up GameStop's stock price—it's also sparked a series of questions with no obvious answers.
Since spearheading the GameStop frenzy of 2021, Gill, better known as “Roaring Kitty” or “DeepF***ingValue,” has kept a low profile. Following his headline-making testimony before Congress early that year, he faded from the public eye, stepping away from YouTube and WallStreetBets where he had kickstarted a meme stock revolution. But, even out of sight, Gill wasn't forgotten—he was the protagonist portrayed by Paul Dano in the 2023 film “Dumb Money,” and mentioned in a slew of books and documentaries.
So, it's hardly shocking that even after three years of silence, Gill's influence seems to have only grown in power. Following his now-famous May 13 gamer tweet, which shows a man leaning forward in a red office chair, holding what looks like to be a video game controller, GameStop’s stock leapt from $17.46 to $30.45. Over the next four days, his TheRoaringKitty account on X was a flurry of activity, posting over 100 times. Each post was cryptic, leaving his over one million followers to decipher what, if anything, he wanted to say.
Following a brief two-week pause, Gill resurfaced on June 2 with a post of a green Uno reverse card. Shortly thereafter, a Reddit post, purportedly by Gill, but unconfirmed, claimed he now controlled $180 million in GameStop stock and options.
Is he manipulating the market, albeit indirectly, by not explicitly mentioning GameStop in his communications? And where did he find the funds to place a nine-figure bet?
When you ask securities lawyers if Gill has broken any rules, the opinions vary.
Christina Sautter, a professor at the Dedman School of Law at Southern Methodist University, says Gill hasn’t crossed any lines.
“Under securities laws, there's two different paths to showing market manipulation,” Sautter said in an email. And she doesn’t think Gill has done either.
Courts require three things to prove a violation of Section 9(a)(2), says Sautter: a deliberate attempt to manipulate a stock, a financial interest in that stock, and the creation of an artificial price. Similarly, Rule 10(b)(5) targets actions that deceive investors by artificially inflating or deflating stock prices. “I don’t see how posting memes – even the one with GameStop and Ben Affleck – rise to the level of showing a manipulative motive or willfulness.”
Peter Molk, a professor at the University of Florida, says there’s an argument to be made in both directions.
“He's not referencing GameStop by name, which weighs against market manipulation liability,” Molk said in an email. “You could argue that someone can be liable if he knew or should have known the consequences of his actions - this happens particularly with insider trading cases - and given the track record and history here, the argument would be he should have known how his posts would affect market prices. Lots of interesting issues in this area.”
Given that Gill's return to social media led to GameStop's stock more than tripling in price following his tweet—with no corresponding corporate news to justify the surge—his recent posts could potentially open the door to scrutiny from the SEC. On June 3, GameStop’s stock rose from its prior close of $23.10, to an intraday high of $40.50, before ending the day up 20% at $28 even.
“All that I can say is that, while I haven’t seen anything posted by Gill that seems deceptive in any real sense, the SEC hates it when somebody makes hundreds of millions of dollars by doing things that seem unrelated to, or even destructive of, the normal functioning of securities markets,” Charles Korsmo, a law professor at Case Western Reserve, said in an email.
According to Korsmo, this situation might be just enough for the SEC to step in and “make his life difficult,” though he acknowledges that pursuing an enforcement action would be “breaking new ground.”
Of course, the Securities and Exchange Commission will view all of this with the benefit of hindsight, said Joan MacLeod Heminway, a law professor at the University of Tennessee. And what they’ll potentially see is that Gill’s broker had concerns.
The Wall Street Journal reported on Monday that E*Trade, where Gill has an account, started their own review. Citing sources familiar with the matter, the paper said that the brokerage was considering kicking Gill off the platform over concerns of “potential stock manipulation.”
“Right now, we may be too close to the Reddit and X posts to be able to see them fully in context,” Heminway said. As of now though, she thinks any claim of manipulation would be difficult to make.
Then there’s the lingering question of where Gill sourced the funds to purchase over $100 million in stock and options. This assumes, of course, that the snapshot on Reddit displaying his positions and their costs genuinely originated from him and accurately reflects what he paid.
At the peak of the 2021 GameStop rally, Gill’s net worth—assuming his reports of his positions were accurate—would have reached around $50 million. That’s a far cry from what he would have needed to stake his latest claim.
Gill did not respond to a request for comment.
Aside from Gill disclosing the source of his funds, one plausible scenario is that he made a fortune on a short-dated, out of the money options trade in May and rolled it all back into GameStop stock and options in June.
In the Reddit screenshot, Gill displays his purchase of 120,000 June 21 $20 call option contracts at $5.68 each. FactSet data confirms that these contracts started trading around that price on May 17, coinciding with the last day of Gill’s tweet spree. Maybe, and this is just a guess, he stopped tweeting as he was loading back up.
Or, maybe he caught lightning in a bottle twice, throwing all his initial winnings into Nvidia, which is up ninefold since February of 2021 and had half a billion dollars to play with, and was looking to settle a score.
