Reddit user behind GameStop saga releases opening statement ahead of hearing
Keith Patrick Gill, known on YouTube and Twitter as Roaring Kitty, released his opening statement ahead of testimony before the House Financial Services Committee on Wednesday about his role in the surge of GameStop's stock price.
The big picture: Gill will join the CEOs of Reddit, Robinhood, Citadel and Melvin Capital at Wednesday's hearing. The committee plans to "examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors," per a statement by Rep. Maxine Waters (D-Calif.), chair of the committee.
Context: Gill first took a long position in GameStop a year ago, when he noticed the embattled video game retailer was among the most heavily shorted stocks on the market.
- He spent months posting about it to the r/WallStreetBets subreddit, a forum of several million amateur investors and spectators who eventually piled into the stock in part to get revenge on hedge funds who were betting that its price would fall.
- The ensuing phenomenon — in which GameStop's price soared from a low of $2.57 last year to over $480 per share — sparked debate about the role of retail investors, hedge funds, short-sellers, market manipulation and more.
What they're saying: "I’ve been asked why I decided to share my investment ideas on social media. My investment skills had reached a level where I felt sharing them publicly could help others," Gill will testify.
- "Hedge funds and other Wall Street firms have teams of analysts working together to compile research and critique investment ideas, while individual investors have not had that advantage. Social media platforms like YouTube, Twitter, and WallStreetBets on Reddit are leveling the playing field."
- "And in a year of quarantines and COVID, engaging with other investors on social media was a safe way to socialize. We had fun."
The bottom line: "The idea that I used social media to promote GameStop stock to unwitting investors is preposterous. I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel. Whether other individual investors bought the stock was irrelevant to my thesis — my focus was on the fundamentals of the business."