Deep F______ Value

[Luke]

18 minutes ago, Parsad said:

 

How do we know he didn't but a ton of puts at or near the top?  Cheers!

He showed his trading account and full positions during the livestream on the broker website BUT could have second accounts of course

[Maddino]

4 hours ago, Luca said:

 

 

When he said he doesn't really know but he likes Cohen and the story but then again he doesn't really know and "just likes the stock" and then drinks his weird beer or whatever and just rambled on half mentally ill...what the fuck...

 

And yeah the option position doesn't make sense to his story...honestly, I think he tried to pump it but then got surprised by the massive offerings and the effect it had? Then he started the stream and I think he was under insane pressure because he had to keep up a happy face but had the inner panic of it going down further etc

 

Pretty much this, I think.

 

He orchestrated his comeback very well from a psychological standpoint.

 

There's a lot of room for speculation about how the market would react to each mysterious step that caused fear for the shorts and hope for the rest.

 

In my view, the stream should have just worked as a self-fulfilling prophecy due to the insane amount of attention and FOMO surrounding this. He wanted to turn it on and watch the stock skyrocket because every ape and his dog thought, "If just a picture is enough for +100%, what will a stream do?" The setup was there and worked quite well until he was caught off guard badly by Ryan Cohen.

 

But what should he have done differently at this point that wouldn't cause even more damage to the hype and his credibility in the community? Cancel the stream? Admit that Ryan Cohen screwed him and the short squeeze narrative?

Maybe he just should have shown some cryptic memes with a lot of room for speculation instead of this weird nonsense.

 

Definitely have some respect for this dude. Maybe he acted accordingly before the stream and this wasn't his only account.

 

[wescobrk]

11 hours ago, Spekulatius said:

I watched Roaring Kitty‘s livestream on YT tonite and I think he could have some mental health issues. The livestream was a total dud, the stock fell like $8 during his stream and his ramblings were totally incoherent and made no sense whatsoever. It seems to me that all this craziness got in his head. I hope he is alright and stays grounded.

I don’t think he has mental health issues.

i watched most of his videos from 3 years ago and he does a great job of him portraying himself as a blue collar guy that doesn’t know much about finance but he is actually a bright guy with a CFA charter and does a lot of analysis.

that has to be touch to watch losing several hundred million while doing a livestream.

i actually think he looked like the same Keith from 3 years ago and he didn’t expect the stock to sink.

he also might be very bored and missed doing the livestreams from 3 years ago and might not have a lot to do anymore since he is no longer working (which he doesn’t need to due to his net worth, of course.)

[Luke]

42 minutes ago, Maddino said:

Pretty much this, I think.

 

He orchestrated his comeback very well from a psychological standpoint.

 

There's a lot of room for speculation about how the market would react to each mysterious step that caused fear for the shorts and hope for the rest.

 

In my view, the stream should have just worked as a self-fulfilling prophecy due to the insane amount of attention and FOMO surrounding this. He wanted to turn it on and watch the stock skyrocket because every ape and his dog thought, "If just a picture is enough for +100%, what will a stream do?" The setup was there and worked quite well until he was caught off guard badly by Ryan Cohen.

 

42 minutes ago, Maddino said:

But what should he have done differently at this point that wouldn't cause even more damage to the hype and his credibility in the community? Cancel the stream? Admit that Ryan Cohen screwed him and the short squeeze narrative?

He needed to uphold that this thing will MOASS and that he will use one of the billions he will make to make a US tour with a gamestop style bugatti chiron or whatever...just something super delusional and FOMO inducing...show his ass with a gamestop tattoo and just keep the party alive. 

 

He totally ruined it with his "rational investor" approach because everybody knows that the stock is not rationally priced and that its bullshit. As soon as he talked rational people started to sell because they are here to make money with new buyers and not owning a part in this business

42 minutes ago, Maddino said:

Maybe he just should have shown some cryptic memes with a lot of room for speculation instead of this weird nonsense.

Absolutely. 

42 minutes ago, Maddino said:

Definitely have some respect for this dude. Maybe he acted accordingly before the stream and this wasn't his only account.

Yeah, final execution lacked and it was not as well thought through unfortunately. If I were him id sell now and take the still reasonable gains. 

[schin]

15 minutes ago, wescobrk said:

that doesn’t know much about finance but he is actually a bright guy with a CFA charter and does a lot of analysis.

@wescobrk - I know he has a CFA and was working in the industry (insurance?). But, again, his brilliance last time was to identify a highly shorted stock and use social media to rally a "commoners" mob mentally movement.  If anything, he was a brilliant sociologist. There was no fundamentals then and there are none now.  If you tell me, he used his CFA/finance background to find a stock with a high short ratio... I guess that's the brilliance...but, he is not the best stock analyst out there.

 

Again, he won the game last time ... and got out... I don't know why he had to come back with this BS. I guess he's bored.. but, he was a one-trick wonder....  He didn't get a fund from it last time. He didn't get invited to ValueX. He didn't get called from Warren Buffett to be part of the Ted and Todd investment team. He got money that was more than he should have expected. He didn't get any creds other than being the king of the stock retards.

[wescobrk]

He should have bought a sports team or something like Mark Cuban. His company just had audio for sports games so extreme luck got him to billionaire status  but he went out and bought the mavericks and now he is respected.

[matthew2129]

His two options now are to either let his 9 figure option position expire worthless or dump everything on Monday and face the next 3 years defending himself against criminal charges 

[whatstheofficerproblem]

3 hours ago, wescobrk said:

CFA charter and does a lot of analysis.

 

Screaming red flag. The CFA today is extremely useless, and anyone who explicitly mentions it outside of LinkedIn is not worth trusting.

 

3 hours ago, Luca said:

He totally ruined it with his "rational investor" approach because everybody knows that the stock is not rationally priced and that its bullshit. As soon as he talked rational people started to sell because they are here to make money with new buyers and not owning a part in this business

 

I think he did want to cash out and at the top when the portfolio hit ~$1B, but was probably told by lawyers not to do so, because then he would likely be investigated by the SEC.

[ValueArb]

13 hours ago, Parsad said:

 

How do we know he didn't but a ton of puts at or near the top?  Cheers!

 

His history is that he doesn't unload his positions early. Supposedly he held the last time for many months past the 2021 squeeze and as far as I know never announced he had sold. This is all consistent with his anointment as "leader of the movement" by the Reddit Ape crowd, he seemed to take their adulation and his responsibilities very seriously so I'd be shocked if he tried to pump and dump now.

 

Quote

By late Jan. 2021, Gill was up over 4,000% on stock and options in the company, with his GameStop position plus cash worth nearly $48 million, according to his posts.

 

In an April 16, 2021 WallStreetBets post, which would be his last for three years, Gill shared screen shots showing he had exercised call options on GameStop to acquire 50,000 more shares in the retailer, sparking thousands of comments lauding the punchy move.

 

https://www.reuters.com/business/finance/who-is-keith-gill-online-influencer-sending-gamestop-shares-soaring-again-2024-06-07/#:~:text=2021%2C Gill was up over,million%2C according to his posts.

 

The big question I haven't seen an answer to is how did he get $$165M to establish this new position? If he had $48M in Jan 2021, he likely had significantly less later as GME traded down rest of year and also had to pay taxes. And then he bought  a massive mansion and fleet of exotic sports cars. If he sold anytime in late 2021 or 2022 he should have netted less than $30M. There is a rumour he made a killing on Solano crypto, so maybe he's increased his bankroll substantially since then. But even if he doubled or tripled his portfolio since 2021 he would need to use margin to help establish his GME position.

 

For example, lets assume he grew his portfolio to $100M in the last 2 years, and put it all into this trade + $65M in margin debt. If the flood of new shares causes GME to finish at or below $20 on June 21, the $65M he paid for those short dated options disappears. Now he's got $100M in assets and $65M in margin debt for a net value of $35M, a loss of $65M that reduces his net worth back to $35M. Worse, if GME drops to $18, his account gets automatically liquidated and all positions sold, and the price would get hammered as E-Trade dumps 5M shares on the market as quickly as possible. He could come out of it with his entire net worth zeroed out. 

 

I have no idea if he did use a lot of margin, but I do know he's a huge gambler. You don't turn $50,000 into $50M in a single trade without gambling massively. If he turned an after tax $30M into $100M the last few years it means he kept gambling. And this trade built on 3 week options shows he's still gambling. So it would be in keeping with what got him here to gamble his entire net worth thinking he could control the market without even understanding the changes that have occured since the first time.

 

Keith Gill is like one of those guys who shows up at my local casino for the first time and starts on an amazing heater where he wins almost every day, which he mistakes for proof that he's gods gift to poker. I've seen it happen numerous times where after a few insanely good months someone quits their day job to play full time in high stakes games against the toughest players and it never ended well. 

 

Kind of like the Archie Karras story. Archie was a degenerate gambler who ran $10,000 into $40M in large part by beating the best poker players in Vegas. They kept playing him because he was objectively terrible at poker but he still kept winning (there are pretty good reasons to think he was cheating). They never won most of their money back, but he couldn't stop gambling and lost it all in casino games he couldn't cheat. 

 

https://en.wikipedia.org/wiki/Archie_Karas#:~:text=Anargyros Nicholas Karabourniotis (Greek%3A Ανάργυρος,as The Run%2C when he

Edited June 8 by ValueArb
remembered archie karras

[wescobrk]

I don’t know how much his wife makes but I’ve read his wife works for Goldman.

valid points though as I also read he paid over 7 million for a mansion.

maybe he bought call options on nvidia or something else?

crypto could definitely also be a factor.

he must have some very loyal friends as I’m surprised there haven’t been any quotes from people close to him about anything really over the past 3 years.

[aws]

The reporting indicated he went heavy into call options before returning. The stock went from 10 to almost 80 in a few days, so short term options gains could easily explain his $200 million score. I don't know how reliable the data is, but some reddit sleuths found opening trades worth $8 million that were closed for approximately $208 million.

 

"

Plugging all of that into a spreadsheet, I'm looking at these approximate numbers:

Our mystery suspect traded at least 95,000 5/17 call contracts.
Edit: He also had 25,000 5/24 calls!
He bought in for at least $6,000,000 $8,000,000 (including the 5/24 calls).
He sold for at least $168,000,000 for a profit of at least $162 million dollars for an average return of 2800% $208,000,000 for a profit of over $200,000,000 with an average return of 2550%.

And two weeks later DFV shows up to reddit with a $205M portfolio 

 

 

[wescobrk]

Makes sense, buy a ton of options then announce his return.

same as Ackman did a few years ago as someone pointed out.

for the people that hate him I hope they also hate ackman and all the other managers that do the same.

[schin]

1 hour ago, wescobrk said:

Makes sense, buy a ton of options then announce his return.

same as Ackman did a few years ago as someone pointed out.

for the people that hate him I hope they also hate ackman and all the other managers that do the same.

 

It's disingenuous, but I guess not illegal.. He's a self-promoter and knows just mentioning it would be a catalyst. I guess he has the Warren Buffett affect on stocks (like Chubb), but Warren holds long term....  They can sell short term since they don't have insider information.. but, someone else is holding the bag... but, the others have to take ownership of being lemming I guess.

[bizaro86]

Yeah. The $5 premium options were bought after the initial runup. Does anyone believe he didn't buy calls BEFORE he started a concerted campaign to run up the price?

 

Seems like that first batch of calls is almost certainly where the money came from to buy this batch.

[Spekulatius]

On 6/8/2024 at 9:40 AM, wescobrk said:

I don’t think he has mental health issues.

i watched most of his videos from 3 years ago and he does a great job of him portraying himself as a blue collar guy that doesn’t know much about finance but he is actually a bright guy with a CFA charter and does a lot of analysis.

that has to be touch to watch losing several hundred million while doing a livestream.

i actually think he looked like the same Keith from 3 years ago and he didn’t expect the stock to sink.

he also might be very bored and missed doing the livestreams from 3 years ago and might not have a lot to do anymore since he is no longer working (which he doesn’t need to due to his net worth, of course.)

If you watch his first livestreams, it’s pretty clear he knows what he was doing. He was buying cheap stocks that were beaten down and GME was one of them. He was buying basket of them and looking at balance sheets, charts and income statements etc . His stream changed later when it became mostly about about GME, the short squeeze thesis and later the reddit phenomenon. I’d also think his personally changed between then and now, but it’s hard o gage what is real and what is showmanship,

[Dalal.Holdings]

Gonna be hard for folks to come to terms w the fact that it's not 2021 anymore

[Saluki]

I hate to chime in on this because it's a very complicated area of law, and I don't do it anymore, so I am wary of giving bad information. However, this infuriating video gives a pretty good explanation of how this stuff happens, and why it's hard to bring cases against these dirtbags.  

 

Towards the end of the video, he mentions a legal theory that was used a lot in prior cases to sue people for this type of behavior.  He doesn't mention what it's called, but if you want to read up on it, it's called the "fraud on the market" doctrine. Basically, you don't have to identify specific persons who were defrauded because you defrauded the market by disseminating false information or did other things to manipulate the stock price. 

 

 

 

[brobro777]

$23, -17% ouch!

 

Another hilarious day watching from the sidelines!

 

 

[Dalal.Holdings]

What happens if they sell the 75M shares in the low 20s instead of at $40? The popcorn on this show is endless

[Luke]

[brobro777]

Man this show is really entertaining 

 

I wonder how it ends, who gets away the money!

 

 

[Dalal.Holdings]

20 minutes ago, brobro777 said:

Man this show is really entertaining 

 

I wonder how it ends, who gets away the money!

 

 

 

The house always wins

[wescobrk]

If he ever does another livestream he will need to do some analysis like his posts from 3 years ago.

Edited June 10 by wescobrk

[ValueArb]

3 hours ago, Dalal.Holdings said:

What happens if they sell the 75M shares in the low 20s instead of at $40? The popcorn on this show is endless

 

In May they sold 45M shares in one week, which was about 25% of the total volume. It might have been less, the announcement of the ATM offering and announcement it was concluded were one week apart so I'm assuming it took the whole week. But they could have sold it more quickly and been a higher percentage.

 

On Friday GME traded 182M shares, so 75M would have been around 40% of the volume. They did not announce conclusion of the sale on Saturday, so it seems likely they still have shares left to sell. But at 25% of the volume they should be done today. My guess is they had very few shares left before today because when they sold 25% of the volume that week in May the stock price only dropped from $23 to $19, while the stock price was utterly crushed on Friday, which implies they sold higher than 25% of the shares traded.

 

What should be scary to DFV is that the 45M share sale netted $21/share, so clearly management is happy to sell shares above $20, and nothing stops them from doing additional ATMs if the price increases again. He paid over $5/share for put options for 12M shares with a June 21 expiration, so it looks very likely he's going to take a big loss and is at significant risk of having them expire worthless for a $65M loss.

 

Establishing a huge option position that was barely in the money and expires in 3 weeks to bet on a short squeeze in a company that just demonstrated that they are now ready to drop ATM offerings at a days notice seems like one of the dumbest trades in world history. But I still have to wade through numerous tweets on my timeline proclaiming Keith Gill is really an incredible actor who faked everyone out playing an idiot on livestream while he's actually playing Putin level 5D chess.

Edited June 10 by ValueArb
Putin comparison

[ValueArb]

3 hours ago, ValueArb said:

 

In May they sold 45M shares in one week, which was about 25% of the total volume. It might have been less, the announcement of the ATM offering and announcement it was concluded were one week apart so I'm assuming it took the whole week. But they could have sold it more quickly and been a higher percentage.

 

On Friday GME traded 182M shares, so 75M would have been around 40% of the volume. They did not announce conclusion of the sale on Saturday, so it seems likely they still have shares left to sell. But at 25% of the volume they should be done today. My guess is they had very few shares left before today because when they sold 25% of the volume that week in May the stock price only dropped from $23 to $19, while the stock price was utterly crushed on Friday, which implies they sold higher than 25% of the shares traded.

 

What should be scary to DFV is that the 45M share sale netted $21/share, so clearly management is happy to sell shares above $20, and nothing stops them from doing additional ATMs if the price increases again. He paid over $5/share for put options for 12M shares with a June 21 expiration, so it looks very likely he's going to take a big loss and is at significant risk of having them expire worthless for a $65M loss.

 

Establishing a huge option position that was barely in the money and expires in 3 weeks to bet on a short squeeze in a company that just demonstrated that they are now ready to drop ATM offerings at a days notice seems like one of the dumbest trades in world history. But I still have to wade through numerous tweets on my timeline proclaiming Keith Gill is really an incredible actor who faked everyone out playing an idiot on livestream while he's actually playing Putin level 5D chess.

 

Ok, my math was off a bit from an incorrect assumption. I thought the May 17 offering announcement was after hours, but it was before, so the actual percentage of shares sold over the 6 days was around 14%. And also the closing price the day before was $27, so it did seem to have a strong effect on the price over those 6 days (ending at $19).