Crypto Revelation: Challenging Wall Street, how did a super KOL beat the short sellers and make $40 million?

Written by: Xiaobai Navigation Coderworld

Roaring Kitty, one of the best retail traders of all time, $GME He turned $53,000 into more than $46 million.Xiaobai NavigationIt is back again, and has led to a new round of MEME craze, whether it is the US stock market orcryptocurrency,$GME Restarting the moonshot mode, this is his story and the revelation.

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 Twitter account with the goal of "finding stocks and seizing investment opportunities". In 2015, he also joined YouTube, regularly broadcasting live to show his trading and market research. He also joined Reddit in 2019 under the username DFV (DeepFuckingValue).

To use today's popular terms, Keith Gill is a US stock KOL.

The turning point of the legendary story occurred in 2019, when Gill began buying GME shares, allegedly because he felt that GME shares were severely undervalued.

At that time, another person who was also optimistic about GME was Michael Burry, a Wall Street tycoon. He was the prototype of the protagonist of "The Big Short", who fought against Wall Street alone, shorted US real estate subprime bonds and made a fortune. But later everyone learned that Burry had cleared his position before GME stock went crazy (in the fourth quarter of 2020).

Initially, Gill bought approximately $53,000 worth of GME at an opening price of $5. He then began to announce his holdings on the WallstreetBets sub-forum of the Reddit forum, and promoted it heavily on YouTube and Twitter, live-streaming his investment portfolio and investment strategy.

At that time, GameStop was still a "rotten company" mired in financial difficulties: it lost more than 80 million U.S. dollars in the quarter, and its sales fell by 25% year-on-year. Even layoffs and store closures did not help.

Someone commented on his post: "Brother, what made you invest $53,000 in GameStop?" Gill said he always believed in the company's future potential.

In July 2020, Gill made a life-changing discovery: the number of GME shares shorted was 150% of the outstanding shares.

Generally speaking, to short a stock, an institution borrows the stock and sells it, then buys it back on a specified date. If the stock price falls, the hedge fund can earn the difference by "selling high and buying low". But if the stock price rises, the short sellers will have to buy back the stock, which may push up the stock price and cause a "short squeeze". The players who hold these stocks can earn profits in return.

Gill discovered the opportunity. Short positions may face the risk of short squeeze, while long positions may have the opportunity tomake money.

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 the place 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 well-known e-commerce company Chewy announced its investment in GME, and co-founder Ryan Cohen joined the GME board of directors. Stimulated by favorable factors, more and more retail investors flocked to buy GME stocks, and the stock price rose by as much as 50% in a single day, and the monthly increase was close to 700%.

Under the surge, Melcin Capital was about to collapse. 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 resistance from 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 abandon short selling. In one month, its assets evaporated by more than 50%, with a loss of up to 6.8 billion US dollars, making it the hedge fund with the craziest net value drawdown since the 2008 financial crisis.

At this point, retail investors had won a phased victory, but suddenly Robinhood, a trading platform commonly used by retail investors, announced trading restrictions. Retail investors were unable to buy GME shares, and the stock price fell.

This was seen as Wall Street starting to cheat and not follow the rules, and the GME long-short battle 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 the power behind GME was not simply retail investors, GIill, who was pushed to the forefront of the times, became a banner and leader of the retail investor movement. He also earned the biggest pot of gold in his life.

In 2019, $GME was opened at $5; in 2021, $GME Reaching a peak of $483. In January 2021, Gill posted a performance screenshot on WSB showing that his combined earnings from GME stocks and options exceeded $31.47 million, with a cumulative holding of $46 million.

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

This was the story of the U.S. stock market in the past. Does the current crypto world seem familiar to you?

A large number of VC coins have poured into the market, and retail investors have become the exit liquidity for VCs, so it has become an unspoken rule that they do not take over from each other. Not buying VC coins is like the collective short squeeze of WSB retail investors a few years ago, which is a form of class resistance.

Retail investors turned their attention to MEME, and MEME KOLs such as Ansem rose in this cycle. His contribution to the "MLM" of $WIF is obvious to all.

Just like $GME is backed by financial giants,But the times and cycles still chose Gill as their spokesperson, $WIF Ansem was also chosen as the spokesperson, and the two complemented each other.

In a market where MEME is 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 new horizons.

The article comes from the Internet:Crypto Revelation: Challenging Wall Street, how did a super KOL beat the short sellers and make $40 million?

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