How ‘Roaring Kitty’ Broke Wall Street, Then WallStreetBets

Photo-Illustration: Intelligencer; Photo: Getty Images

Keith Gill’s second act has gone well for him. Gill, the meme-stock trader nonpareil better known as Roaring Kitty and DeepFuckingValue, made his triumphant return to shitposting last month. GameStop, his stock of choice, has skyrocketed, inflating his net worth to around $300 million. Wall Street has, predictably, found itself at a loss over how to handle all this. E*Trade, owned by a Too Big To Fail bank, is considering kicking him off their platform, and Gill is already under investigation for the high crime of posting memes. But what’s more surprising is that Gill and his horde of self-identified apes, the fanatical investors who act more like rowdy Philadelphia sports fans than buttoned-up investors, has not just divided the financial world — but there has been a split on Reddit, the online forum that birthed the meme-stock movement in the first place.

The original meme-stock rally of early 2021 was fueled, in large part, by Gill’s argument that Wall Street had gotten GameStop’s fundamental business wrong, and was too pessimistic about it going bankrupt. Over time, this would become unhinged from a stuffy thesis about valuation and turn into a rallying cry that buying shares of a middling brick-and-mortar video-game seller was somehow akin to the French Revolution. And it kind of worked, with a major hedge fund that was betting against GameStop, Melvin Capital, shutting down in the process. Ground zero for the thesis turned movement was one of Reddit’s most infamous forums, WallStreetBets, a profane and often hilarious gathering of traders who pile into a stock (or, frequently, all-or-nothing bets on options) not necessarily because it is the best investment thesis on the forum, but because it is the funniest and the most audacious. Often, as in the case of GameStop, there is also the adrenaline rush that comes with betting large sums of money on extremely risky plays.

This new phase of the meme-stock frenzy, though, has not taken place on Reddit. On June 2, Gill posted a screenshot of his position in GameStop. Gill owned 5 million shares, and had options that could grant him another 120,000 more — giving him roughly 5 percent of the company, a giant stake for an individual investor. The disclosure sent the stock up nearly 100 percent. (It also spawned theories about how he could have so much money, with short seller Andrew Left speculating that someone else was funding him). Look closely, though, and the post is on a different Reddit forum called Superstonks, rather than WallStreetBets. (“Stonk” is a joke misspelling of “stock” that revels in the dumbness of it all.)

Superstonks is one of several forums that came into being after the apes clashed with WallStreetBets moderators they deemed insufficiently pro-GME. In response, WallStreetBets subsequently throttled discussion of the video game retailer around 2021. “GME people started being jerks and getting conspiratorial and weird and accusing us of favoritism or the opposite,” one WSB moderator told me. At first, WSB tried to limit GameStop to a single thread, but, the moderator told me, that didn’t contain the apes’ accusations that WSB was biased against them. While Superstonks isn’t as widely known as WallStreetBets, it’s a subreddit that is even more dedicated to meme-stock rallies, conspiracy theories, and anything that can make GameStop’s shares go higher.

During the first meme-stock rally, the apes had arguably exposed a flaw in how Wall Street worked. These were a novel type of trader — certainly not a doom-and-gloom bear, and more out of control than a bull — that bought and held a stock for seemingly irrational reasons. But the WallStreetBets of 2021 wasn’t just pure testosterone and YOLO risk-taking. In October that year, the Securities and Exchange Commission noted in its report on GameStop that there was an actual investment idea — one that wouldn’t be so out of place at a garden variety hedge fund. “Some of this discussion argued that GME was undervalued based on fundamental analysis and therefore constituted an attractive investment, while other discussion focused on its ability to transition to an e-commerce company,” according to the report.

That’s all fine, but it was still the apes who sent GameStop up 1,000 percent, at least until it came crashing down. Whether they were daredevils or nihilists, the apes — who were certainly encouraged by Gill — made GameStop into something more personal, and they were out for blood. On WallStreetBets, hedge funds shorting GameStop became enemies. At the time, hedge funds were so convinced that GameStop was headed for bankruptcy that it was among the most bet-against stocks in the U.S. Since so many big-money investors would profit off GameStop’s failure — shorting the stock, in Wall Street parlance — that created a situation that kept the company’s price as low as it was, in the apes’ eyes. The apes then developed a plan to crush those short sellers, like Melvin Capital. The “mother of all short squeezes” — or MOASS, for the gleefully profane — was a plan to bleed money out of any trader betting that GameStop’s price would go down by forcing them into bankruptcy by making their anti-GameStop bets too expensive to hold onto. Or, as the SEC put it: “Unusually high levels of short interest in GME presented the potential for a coordinated ‘short squeeze.”

It’s not exactly clear why Gill is out to make GameStop’s share price go up this time, except for the obvious reason. Some short-sellers had returned to betting against the stock, and they’ve already lost more than $1 billion collectively. But it is far from the most hated stock out there. Since Gill is mostly communicating through memes these days (and ignoring requests for comment), his followers have taken to speaking for him, piecing together a master plan that makes good on the MOASS. (In theory, this plan would wipe out short-sellers in one final master stroke. But in the fever-pitch world of Superstonk, this has gotten a less-than-enthusiastic response.)

Over on WallStreetBets, it’s almost as if GameStop doesn’t exist. “We don’t have a problem with ballsy gambling at all. That’s kinda the WSB schtick,” one moderator told me. “I hope they sell the rip and make their money, even if they’re not allowed to post about it.” The weird and vaguely frightening thing about this meme rally is that it’s not really clear how this all ends. The apes may have one move — make a number go up as loudly as possible — but they’ve shown that they’re more than whatever platform or forum they have been posting on. “I know [Gill] has a bigger position than ever. I know most of you have bigger positions than ever,” one Superstonk ape wrote. “I know that I’ll never give up or give in and that you won’t either.”

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