Questions Persist About The Source of Funds Used by Roaring Kitty To Purchase Shares

A month after the re-emergence of Keith Gill, known online as Roaring Kitty, questions persist about the source of his funds used to buy hundreds of millions of dollars worth of GameStop and Chewy shares.

“It is kind of stunning, the amount of money that he put together,” says Steve Sosnick, chief strategist of Interactive Brokers.

Before his hiatus, Gill helped lead the retail investor movement that propelled GameStop shares to unprecedented levels in 2021. This trading frenzy also boosted shares of AMC Entertainment Holdings, Nokia, and BlackBerry, devastating short sellers but enriching many retail investors temporarily.

Fans watched Gill’s holdings soar from modest amounts in September 2019 to over $34 million by April 2021, when he posted his last portfolio screenshot on Reddit’s WallStreetBets forum. If Gill had sold his shares at GameStop’s peak in June 2021, he would have had more than $60 million.

However, this amount is still far less than the positions he recently disclosed in GameStop and Chewy. “The question is, where did that guy get that money from?” asked veteran short seller Carson Block on his podcast after Gill revealed his new stake in GameStop.

Regulators with the Massachusetts Securities Division are also investigating Gill’s recent trades. The Wall Street Journal and other media reported last month that this inquiry is ongoing. A spokeswoman for the Massachusetts Securities Division declined to comment further, referring to it as an “ongoing matter.” In 2021, the agency fined Gill’s former employer, MassMutual, $4 million for failing to supervise his social media and trading activity.

ETrade, the Morgan Stanley-owned brokerage used by Gill, has reportedly considered closing his account due to concerns about potential manipulation of GameStop shares. ETrade didn’t respond to messages from Barron’s, and neither Gill, Chewy, nor GameStop provided comments.

Gill’s Twitter feed, dormant since mid-2021, came back to life in May of this year with a post that caused a spike in GameStop shares, foreshadowing the volatility of his return. On June 2, Gill resumed posting screenshots of his portfolio on Reddit. According to these images, Gill held nearly $211 million in GameStop shares and options, along with cash.

For Gill’s $60 million potential earnings from his initial GameStop holdings to have grown to $211 million, his investments would have had to appreciate by approximately 250%. Sosnick notes that achieving such returns would be extremely challenging. “It sort of defies the odds,” he says, “but it’s possible.”

During this period, GameStop’s stock fell 69%, while the S&P 500 gained 25%. Only a handful of S&P 500 components, including Nvidia, would have met the 250% threshold.

Gill continued posting account updates until June 13, when he stopped. His last update showed his account at almost $268 million, partially due to GameStop’s 26% increase during that time.

In a July 1 SEC disclosure, Gill revealed owning 6.6% of Chewy’s stock, making him its largest individual investor with a $242 million stake. This disclosure was required as he passed the 5% ownership threshold on June 24.

Gill may have liquidated his GameStop holdings to finance his Chewy purchase, but he hasn’t updated Reddit users on his current GameStop stake. His last disclosed position in GameStop matched the shares he now holds in Chewy: exactly 9,001,000.

Peter W. Atwater, an economics professor at William & Mary, suggests Gill might be using borrowed money. With nonbank lenders flush with cash, Gill’s track record could make him an attractive borrower. “It wouldn’t surprise me that there are people eager to give him capital,” Atwater says.

Both GameStop and Chewy are closely tied to entrepreneur Ryan Cohen, who is GameStop’s chairman, CEO, and largest shareholder, and who founded Chewy, later selling it to PetSmart. After GameStop stock surged following Gill’s return, the company sold new shares for $2.14 billion, leading to speculation that Cohen may have provided financial support to Gill.

“There’s something on the back end here that enabled him to access that kind of cash,” Block noted on his podcast.


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