“Reliable Source” Claims Roaring Kitty is in Bed With Hedge Funds to Short Stocks?

The S&P 500 hit a fresh record, soaring above 5,600 for the first time, powered by a semiconductor stock surge. It jumped 1.02% to close at 5,633.91, marking a seven-day winning streak. 

The Nasdaq hit an all-time high too, ending at 18,647.45, while the Dow climbed 429.39 points to 39,721.36. 

Chip stocks like Taiwan Semiconductor (up 3.5%), Qualcomm (up 0.8%), Broadcom (up 0.7%), and Nvidia (up 2.7%) led the charge.

Before we get to the main story, here’s the heatmap for today. (That’s a lot of green!)

“Reliable Source” Claims Roaring Kitty is in Bed With Hedge Funds to Help Short Stocks?

We’ve all seen the news. Keith Gill, the legend who sent Wall Street into a frenzy with his GameStop escapades, is back—and this time, he's gone from video games to pet snacks. Known to his Reddit disciples as Roaring Kitty and his YouTube fans as DeepF***ingValue, Gill has now sunk his claws into Chewy with a massive investment. But you probably already knew that—you might even have his poster pinned up in your room.

Now, here’s the plot twist that has everyone, from basement-dwelling Reddit traders to suit-and-tie Wall Street investors scratching their heads: where on earth did he get the cash for this new venture? Did he find a treasure map? Did he rob a bank? Did he crack open his childhood piggy bank? Or maybe, just maybe, is there a mystery investor backing him? The suspense is killing us, and we’re all dying to know the secret.

Gill vanished from the financial scene only to reappear with a thunderous roar. Experts estimate that his combined GameStop and Chewy holdings are at $472 million. But how did he pull that off?

In 2021, Gill’s GameStop stash ballooned to over $34 million. By April, he posted his last portfolio screenshot on Reddit, leaving everyone guessing if he cashed out at the peak. If he did, he could’ve pocketed $60 million. But internet detectives and their math show he’s worth hundreds of millions in stocks.

Steve Sosnick, chief strategist at Interactive Brokers, summed it up: “It is kind of stunning, the amount of money that he put together.” Regulators are equally puzzled. The Massachusetts Securities Division is investigating Gill’s trades. They previously fined his former employer, MassMutual, $4 million for not supervising his trading and are now back on the case.

Gill’s Twitter feed, quiet since mid-2021, sprang back to life in May with a simple sketch of a video gamer, causing GameStop shares to spike. By June 2, Gill was back, posting portfolio screenshots on Reddit. The numbers? Nearly $211 million in GameStop shares and options, plus cash.

(Source: Bloomberg)

If Gill sold his initial GameStop shares at their peak, he would’ve needed some serious stock-picking magic to turn $60 million into $211 million—a 250% return. Steve Sosnick noted, “It sort of defies the odds, but it’s possible.”

(Source: CNBC)

Then, on June 24, Gill disclosed to the SEC that he owned 6.6% of Chewy’s stock, making him the largest individual investor. By July, that stake was worth $242 million. Did he liquidate his GameStop holdings to fund this venture? Maybe, but he hasn’t updated Reddit about his current GameStop position.

Now, here’s where it gets juicy. People on Reddit are buzzing with conspiracy theories. One user, miserymonroe, claimed on r/Gamestopstock that Roaring Kitty is a fraud. According to this user, a supposedly reliable source says Gill doesn't even control his own Twitter account anymore. Instead, hedge funds are allegedly behind the posts, manipulating the market to inflate stock prices, only to sell off and short the stock again.

This user isn’t alone. Others believe Gill might not be doing this all by himself. Peter W. Atwater, an economics professor at William and Mary, suggests Gill might be using borrowed money. With his track record, non-bank lenders could be lining up to throw cash at him. And don’t forget the Ryan Cohen connection. Cohen, the mastermind behind both GameStop and Chewy, could be pulling some strings. After all, GameStop did sell new shares for $2.14 billion when Gill returned to social media.

As for me, until I see any actual evidence, I'm convinced Gill is just a Reddit trader who seized the moment. He's not just doing this to get rich; he's giving Wall Street the middle finger by beating them at their own game. Gill is out here playing 4D chess while Wall Street is still trying to figure out how to open the box.

(Stock.News does not have positions in companies mentioned.)