Influential trader Keith Gill, also known as Roaring Kitty, is a "true believer" in GamepStop Corp., according to Derek Horstmeyer, a professor of finance at the Costello College of Business at George Mason University. Gill this week increased his stake in GameStop.
Horstmeyer told MarketWatch that Gill, who also goes by the moniker DeepF-kingValue online, "has credit" with GameStop $(GME)$ zealots in the shareholder community. "He's a true believer. He has indicated that through his buying," Horstmeyer said during an interview this week. "I think that GameStop community of shareholders respects that."
Shares of GameStop skyrocketed last month following Gill's return to social media and after a June 2 Reddit post from an account associated with Gill appeared to show him holding a big stake in the company.
In an update shared to the Reddit account on Thursday, Gill revealed he has increased his GameStop stake. Gill, a pivotal figure in the 2021 meme-stock frenzy, also sold some or all of his call options with a June 21 expiration date, according to the update.
GameStop's shares are down 3.8% Friday, paring back some of their gains from Thursday's session, when the stock closed up 14.4%.
On June 7, Gill hosted his first YouTube livestream in three years, an event that attracted widespread attention.
The trader's actions have come under regulatory scrutiny recently, although Horstmeyer thinks that Gill is driven by his belief in GameStop's prospects. "All the signs point that he's a true believer and he has not been manipulating things," Horstmeyer told MarketWatch. "He just posted his positions. I don't think that we can fault him for that."
The professor added: "I am not a securities lawyer."
During last week's livestream, Gill discussed what he described as an "overemphasis" on GameStop's legacy business. "They are in the transformation stage," he said, before talking about GameStop Chief Executive Ryan Cohen. "I believe this guy - he might be able to do it," Gill added.
Cohen was named GameStop CEO in September 2023, marking the latest chapter in his attempt to breathe new life into the company. In December, GameStop's board of directors approved a new investment policy that permits the company to invest in equity securities, among other investments. The board gave Cohen the authority to manage the investment portfolio.
GameStop announced layoffs earlier this year as part of its search for a profitability boost.
"I put myself in his shoes, and he seems to be taking the right approach," Gill said of Cohen. "Now it's all about the transformation. That cash pile is growing."
He added: "It becomes kind of a bet on the team. I am a believer."
GameStop shares are up 63.7% in 2024, outpacing the S&P 500 index's SPX gain of 13.8%.
