NEW YORK • In mid-2019, a Reddit user – known as “Roaring Kitty” on some social media accounts – posted a picture on an online forum depicting a single US$53,000 (S$70,000) investment in video game retailer GameStop.
The post attracted little attention, except from a few people who mocked the bet on the struggling company.
“This dude should sell now,” a Reddit user named cmcewen wrote at the time.
But Roaring Kitty was not deterred. Over the next year, he began tweeting frequently about GameStop and making YouTube and TikTok videos about his investment. He also started live streaming his financial ideas. Other Reddit users began following his every move and piling into GameStop.
Roaring Kitty – who is 34-year-old Keith Gill, a former financial educator for an insurance firm in Massachusetts – has now become a central figure in the stock market frenzy.
Inspired by him and a small crew of individual investors who gathered around him, hordes of young online traders took GameStop’s stock on a wild ride, pitting themselves against sophisticated hedge funds and upending Wall Street’s norms in the process.
Their actions – pushing up GameStop’s price by buying so-called options contracts that offer a cheap way to bet on a stock’s direction – have shocked established investors because Mr Gill and his online comrades are the antithesis of the Wall Street titans who have long ruled the stock market.
Mr Gill and his fans socialised on Reddit and YouTube and used no-fee online trading platforms like Robinhood and WeBull.
Many were so devoted to their GameStop investment that they spent hours each week chatting in the comments section of Mr Gill’s videos, delving into the company’s financial filings and arcane details about free cash flow and video game consoles.
Their show of force last week underlines how the financial markets have changed by merging with the world of social media and a younger generation of traders who have been empowered by online platforms.
It has also made some in this new generation wildly wealthy. On Tuesday, Mr Gill posted a picture on Reddit that showed his US$53,000 bet on GameStop had soared in value to US$48 million.
GameStop, which traded at US$4 a year ago, closed on Friday at US$325.
“Your example has literally changed the lives of thousands of ordinary normal people,” a Reddit user named reality-czech wrote to Mr Gill. “Seriously thank you.”
With people now stuck at home amid the pandemic having easy access to free trading at online brokerages, “these guys saw an opportunity and they took it”, said Mr Larry Tabb, the head of market structure research at Bloomberg Intelligence.
Mr Gill did not respond to requests for comment. Late last week, 190,000 viewers tuned in to the Roaring Kitty YouTube channel, which now has more than 74,000 subscribers, as Mr Gill, in a red bandanna and sunglasses, said he would be stepping away “for a bit”.
That day, he live streamed for seven hours while watching a chart of GameStop’s surging stock, laughing and calling out to longtime comrades in the comments.
On Thursday, several online brokerages shut down trading in GameStop, causing the company’s price to plunge by almost two-thirds before steadying. Even ardent supporters wondered if Mr Gill had finally caved in.
Mr Gill then posted another picture on Reddit showing he had stayed firm – and had lost US$15 million. His fans cheered.
“IF HE’S STILL IN, I’M STILL IN,” over 100 followers responded in quick succession. On Friday, their faith was rewarded when GameStop’s stock soared 68 per cent.