In what continues to be one of the more odd financial stories of 2021, one of the main catalysts to set off the GameStop stock craze has continued to buy into the company, even with the up and down motion of the stock value. On April 16, Keith Gill purchased another 50,000 shares of the gaming retailer, bring his total to 200,000 shares exactly.
The initial frenzy started when Gill continued to point out the shorting that was happening with the struggling gaming retailer. Shorting a stock, while somewhat complicated for the casual investor, is when an investor sees a stock they think is overinflated, or will definitely lose value. They then borrow shares, sell them at the current price, and then buy them and return the share after the price drop. This is a gamble that the stock will lose value, and for a time, GameStop was one of the more popular shorted stocks available.
Gill and other Redditors took to buying and holding shares of GameStop, which drove the price upwards. The short calls expired and the stock had to be purchased back at a higher price, losing bigger investors a lot of money in the process, and frustrating hedge funds. Since this occurred, GameStop's share price has fluctuated but has been on the rebound since dropping back down.
At any point, Gill could have cashed out and been a multi-millionaire, even after the drop in price after the initial ascent, but Gill put his money where his mouth is. On April 16, Gill exercised a call option to purchase another 50,000 shares of GameStop stock. A call option is when an agreement is formed that an investor will purchase a certain amount of shares for a determined price. With the 50,000 shares in hand, Gill now owns 200,000 shares in GameStop stock.
Gill is a member of the subreddit WallStreetBets, a group of investors that range from enthusiastic to offensive. While the group has circled the wagons time and again on buying and holding GameStop shares, it has also encouraged poor investment strategies, while also claiming that it's not on them when someone follows their advice and gets burned. While this may be true, the group is named WallStreetBets after all, those looking to grow money would be wise to take a second look at any of the advice being dished out on the forum.
While Gill continues to amass shares of GameStop, the company itself was slow to react to the manipulation of pricing by investors on both sides. Gill's position in the market assures him a grand payday should he ever take it, and should the stock take off, then Gill would be among the ranks of the ultra-rich.