Crypto Revelation: Challenging Wall Street, how did a super KOL beat the short sellers 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 university. In college, he was a track and field star. After graduating in 2009, he first worked for a relative's startup company that made stock analysis software. Later, he changed jobs several times and started working for Massachusetts Mutual Life Insurance Company (MassMutual) in 2019.

In 2014, he created his own Twitter with the goal of "finding stocks and seizing investment opportunities." In 2015, he also joined YouTube and regularly broadcast 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 seriously undervalued.

Also optimistic about GME at the time was Wall Street tycoon Michael Burry, who was the prototype of the protagonist of "The Big Short", who single-handedly fought against Wall Street, shorted US real estate subprime bonds and finally made a fortune. But later everyone learned that Burry had cleared his position before GME stocks 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: it lost more than $80 million in the quarter, 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 the 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 a stock, an institution has to borrow the stock and sell it, and then buy the stock back on a specified date. If the stock price falls, the hedge fund can "sell high and buy low" to earn the difference. But if the stock price rises, the short sellers will have to buy the stock back, which may push up the stock price and cause a "short squeeze". Players who hold these stocks can earn profits in turn.

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

He 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 rival 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 shares, and the stock price rose by up to 50% in a single day, and the monthly increase was close to 700%.

Under the surge, Melcin Capital was about to be unable to bear it. 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 has increasingly aroused the resistance of retail investors. This is also a war. The slogan on WSB is loud: Short sellers must die!

On January 27, Melcin Capital announced that it would close its positions and give up short selling. Its asset size evaporated by more than 50% in one month, 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 was seen as Wall Street starting to play tricks 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 retail force, GIill, who was pushed to the forefront by the times, became a banner and the leader of the retail movement, and he 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 combined earnings from GME stocks and options exceeded $31.47 million, and his cumulative holdings reached $46 million.

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

This is the story of the US 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. MEME KOLs such as Ansem rose in this cycle, and 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 a 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. Retail investors still have the opportunity to become super KOLs, stir up the market, and create a new world.

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