Youtuber Roaring Kitty wins millions, Melvin Capital loses billions
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The Youtuber Keith Gill aka Roaring Kitty gives financial and investment tips on his channel. Since August 2020, he had recommended buying Gamestop stocks, calling them undervalued. The rally made him a millionaire.
A 34-year-old family man from the US state of Massachusetts can be seen as a contributor to the price rally for the Gamestop share. As the Daily Mail reports, Keith Gill has been recommending Gamestop shares on his YouTube channel Roaring Kitty since August at the latest.
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Keith Gill, Wallstreetbets Messiah
In addition, he posts screenshots of his account on Reddit at irregular intervals, which his audience can use to understand the progress of his Gamestop investment. They show that his $ 755,000 investment is now worth $ 46 million, after a brief spike of $ 48 million.
The Robinhood traders, who organize themselves through the Reddit forum Wallstreetbets, are a role model for what is possible. Some refer to him as the messiah of the new financial world. The Daily Mail estimates that about half of the total of 13 million Robinhood users took part in the Gamestop rally.
Melvin Capital hedge fund loses 53 percent
While Gill, who is a full-time financial advisor at an insurance company, and those who follow his investment tips on Roaring Kitty, make massive profits on their Gamestop shares, larger hedge funds have suffered heavy losses.
The hedge fund Melvin Capital is likely to have suffered the greatest damage known to date. He had bet on falling prices through short sales and was caught off guard by the Robinhood traders.
As the Wall Street Journal reported, Melvin Capital posted a 53 percent loss of its portfolio in January 2021. After the Gamestop rally, only less than half of a starting volume of $ 12.5 billion was left.
In a spectacular rescue operation, major investors, including the hedge fund titans Steven Cohen and Ken Griffin, pumped $ 2.75 billion into Melvin Capital, so that the fund is currently back with around $ 8 billion. In the course of the action, Melvin Capital is said to have freed its portfolio of many risks.
