Financial trading platform E*Trade is considering banning Keith Gill (YouTube user “Roaring Kitty” who is known for starting the GameStop short squeeze in 2021) citing concerns over “potential stock manipulation” after he purchased GameStop options recently, according to an exclusive report from The Wall Street Journal.
Over this past weekend, Gill had posted a picture of his E*Trade account with $115.7 million worth of GameStop stock as well as a new set of options to expire later in June. His gains on the position were valued at $6.86 million. GameStop stock increased 31 percent Monday.
E*Trade is owned by Morgan Stanley and is heavily integrated with the financial establishment. The platform worries Gill’s popularity online means he has power to pump shares for his own profit, possibly constituting market manipulation.
As co-host of Breaking Points Saagar Enjeti pointed out, E*Trade’s policy seems highly selective, choosing to punish one user essentially for having a large following while leaving unpunished many high-profile insider traders.
So if you go on CNBC to pump your book or tweet literal bullshit as a fund manager that's cool
— Saagar Enjeti (@esaagar) June 3, 2024
but if you post on Reddit and command a big following then E trade will ban you pic.twitter.com/QcuD676DNI
Enjeti seems to have not-so-implicitly been referring to CNBC analyst Jim Cramer, who weighed in on the matter himself.
Someone got picked off bad who bought Gamestop at $47.50
— Jim Cramer (@jimcramer) June 3, 2024
Social media users were quick to dogpile on those voicing support for the ban or saying it was reasonable.
To everyone saying “isn’t this what Ackman & other HF managers do on CNBC”, I agree there are similarities & two wrongs don’t make a right. The diff here is Keith is now just posting random images to trigger a pump. HF managers often discuss fundamentals to support their views
— litquidity (@litcapital) June 3, 2024
Barstool founder and president Dave Portnoy reacted to the proposed E*Trade ban in a video clip.
If E*Trade is considering kicking Roaring Kitty off their platform it means he’s doing something right #GME #AMC #DDTG pic.twitter.com/SOsaQIrYr5
— Dave Portnoy (@stoolpresidente) June 3, 2024
As previously reported, GameStop stock surged to nearly 70 percent after Roaring Kitty, the online streamer who drove the GameStop short squeeze in January 2021, made his first social media post in three years May 12th. The post, which amassed 73,000 likes and 14 million views in 15 hours, was a simple cartoon of a man adjusting himself in his chair to become more alert with a video game controller in his hands. On his profile, he had pinned a four-minute video explaining the GameStop short squeeze from 2020. He continued to post memes throughout the morning.
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
Roaring Kitty, real name Keith Gill, is a former marketer for Massachusetts Mutual Life Insurance. Going by “DeepF——Value” on Reddit, Gill garnered a cult following in the days of the COVID lockdown economic haze, corralling followers to support the video game retailer GameStop as if they were a decentralized hedge fund. They specifically supported stocks that were being targeted for demise by hedge funds and short sellers like Melvin Capital, thereby forcing the funds to cover their short positions and inflate the price of the stock to nearly $120 a share, split-adjusted, from about $3 in the course of ninety days.
Ken Griffin’s Citadel and Point72 ultimately had to swoop in and prop Melvin up with $3 billion due to the outsized losses. Online brokerage Robinhood was forced to limit the ability to trade heavily shorted stocks, which encouraged a user to file a class-action lawsuit against the app. It was eventually dismissed in August 2023. Gill was also hit with a class action lawsuit for allegedly pretending to be a novice trader and disguising his status as a “licensed professional.” That suit was also dismissed. Keith was called to testify in Congress alongside Robinhood, Melvin, Reddit, and Citadel, and his story was turned into a 2023 film called Dumb* Money.
