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June 7, 2024 • 1hr 2min
The GameStop Guy Has Returned… (And Has A New $210M Bet)
My First Million
In this episode, Sam Parr and Shaan Puri discuss the latest developments in the GameStop saga, focusing on the actions of Keith Gill, also known as "Roaring Kitty." Gill turned a $56,000 investment in GameStop into over $210 million by holding the stock through a massive short squeeze. The hosts explore the implications of Gill's success, drawing comparisons to the creator economy and questioning whether his tactics could be considered market manipulation.
The GameStop Guy Has Returned… (And Has A New $210M Bet)
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Key Takeaways
- Keith Gill, known as "Roaring Kitty" on Reddit, turned a $56,000 investment in GameStop into over $210 million by holding the stock through a massive short squeeze.
- Gill has been quietly accumulating more GameStop shares and call options over the past few weeks, using a strategy of selling equity to buy leveraged call options and then announcing his positions to drive the stock price up.
- The story of Gill's success has drawn comparisons to the creator economy, where influencers can monetize their audience in unique ways beyond just selling products.
- There are questions around whether Gill's tactics of using social media to influence the stock price could be considered market manipulation, even if not technically illegal.
- Ryan Cohen, the former Chewy CEO who owns a large stake in GameStop, is emerging as another key figure in the GameStop saga as he works to transform the company.
- The rise of running clubs and endurance event businesses catering to a new generation of fitness enthusiasts points to changing consumer trends and opportunities for creative entrepreneurs.
Introduction
In this episode, Sam Parr and Shaan Puri discuss the latest developments in the GameStop saga, focusing on the actions of Keith Gill, also known as "Roaring Kitty." Gill turned a $56,000 investment in GameStop into over $210 million by holding the stock through a massive short squeeze. The hosts explore the implications of Gill's success, drawing comparisons to the creator economy and questioning whether his tactics could be considered market manipulation.
Topics Discussed
Roaring Kitty's $200M GameStop Holding (0:00)
- Keith Gill, under the username "Deep F**king Value" on Reddit and "Roaring Kitty" on YouTube, became a key figure in the GameStop short squeeze in 2020-2021.
- Gill turned a $56,000 investment in GameStop into over $30 million, holding the stock through the volatility.
- After going silent for a while, Gill has recently returned to social media, posting cryptic memes that have caused the GameStop stock to surge again.
- Gill has now revealed that he has accumulated over $210 million in GameStop shares and call options, making him a "whale" in the stock.
Is Keith Gill the Most Genius Creator Behind a Brand? (8:41)
- The hosts compare Gill's success to the creator economy, where influencers can monetize their audience in unique ways.
- Gill has essentially created a personal brand and following around his GameStop investment thesis, without having to sell any physical products.
- This allows him to potentially profit from his audience's interest in GameStop without the hassle of running an actual business.
- However, there are questions around whether Gill's tactics of using social media to influence the stock price could be considered market manipulation, even if not technically illegal.
Where Did the $65M Come From? (14:53)
- The hosts wonder how Gill was able to accumulate $65 million in GameStop call options on top of his existing $115 million equity stake.
- One theory is that Gill sold off most of his equity position at the peak, then used the proceeds to buy the call options, allowing him to potentially profit from further upside in the stock.
- This would be a savvy strategy, but it raises questions about the source of the capital and whether Gill is engaging in any questionable practices.
The 7 Stages of GameStop FOMO (17:44)
- The host recounts his own experience with the GameStop frenzy, going through the "7 stages of FOMO" - from ignoring it, to dismissing it, to chasing it, to regretting it.
- He ultimately decided that trying to time the GameStop trade was not worth the mental energy and distraction, and that the best approach is to do nothing.
- This reflects a mature perspective, recognizing that even profitable trades can be the result of luck rather than skill, and that it's important to avoid getting caught up in the hype.
Ryan Cohen's Activist Investments (20:00)
- Ryan Cohen, the former CEO of Chewy, has emerged as another key figure in the GameStop saga.
- Cohen has taken an activist investor approach, building large stakes in GameStop, Bed Bath & Beyond, and other companies he believes are undervalued.
- Cohen's strategy is to push for management changes and business transformations to unlock the companies' potential, often using his large social media following to rally retail investors.
- The hosts see Cohen as a young, unconventional investor who is thinking differently about value creation compared to traditional Wall Street figures.
Shaan's Honest Take on Paternity Leave (26:34)
- Shaan discusses his recent experience with paternity leave, noting that while it was a positive experience, it was also much harder than he expected.
- He realized that being the primary caretaker for young children is extremely demanding, despite the common myth that staying at home is easier than working.
- Shaan's perspective provides a refreshingly honest take on the challenges of parenthood, countering the idealized portrayals often seen on social media.
Painting the Windows Black (31:53)
- The hosts discuss the concept of "painting the windows black," referring to the extreme focus and intensity that some successful people apply to their work.
- This is exemplified by the story of Sylvester Stallone writing the Rocky screenplay, where he locked himself in his house and painted the windows black until he finished the script.
- The hosts suggest that this level of single-minded dedication could be applied to creative projects, such as the host potentially writing a play about the Lehman Brothers story.
The Rise of Running Clubs (37:03)
- The hosts discuss the growing popularity of running clubs and endurance event businesses, which have seen a surge in interest during the pandemic.
- Influencers like Nick Bare have helped popularize the "hybrid athlete" concept, where people combine weight training and running.
- The hosts highlight examples of creative endurance event businesses, such as the "Speed Project" and the "Rock 'n' Roll Marathon Series," which have found success by adding unique twists to traditional running events.
- They suggest that there may be opportunities for entrepreneurs to create new "suburban Iron Man" type events that cater to a broader audience beyond hardcore endurance athletes.
Scott Harrison's Unsolicited Feedback (51:19)
- The host shares a story about receiving unsolicited feedback from Scott Harrison, the founder of Charity Water, who called to point out the host's overuse of the word "like" in his podcast.
- The host was initially embarrassed but ultimately grateful for the feedback, recognizing it as a genuine act of care and friendship.
- This experience inspired the host to consider how he can provide similar feedback to others in his life, as a way to show care and help them improve.
- The hosts discuss the importance of radical candor and the courage it takes to provide honest, constructive feedback to those close to us.
Conclusion
This episode of My First Million provides a deep dive into the latest developments in the GameStop saga, focusing on the remarkable story of Keith Gill and his ability to leverage social media and options trading to amass a $210 million position in the stock. The hosts also explore the broader implications of Gill's success, drawing parallels to the creator economy and questioning the ethics of his tactics.
Beyond the GameStop story, the episode touches on a range of other topics, including the rise of running clubs and endurance event businesses, the challenges of parenthood, and the value of providing honest, constructive feedback to those close to us. Throughout the discussion, the hosts demonstrate their ability to analyze complex business and financial topics through a lens of creativity, empathy, and a willingness to challenge conventional wisdom.
Overall, this episode of My First Million offers a thought-provoking and multifaceted exploration of the evolving landscape of entrepreneurship, investing, and personal growth, providing listeners with a wealth of insights and inspiration to apply to their own lives and pursuits.