GameStop Investor Withdraws Lawsuit Against “Roaring Kitty” Keith Gill

TLDR

• A lawsuit accusing Keith Gill (known as “Roaring Kitty”) of a “pump and dump” scheme involving GameStop shares was filed on Friday, July 1, 2024.
• The lawsuit was voluntarily dismissed by the plaintiff, Martin Radev, on Monday, July 1, 2024, without explanation.
• The suit alleged that Gill manipulated GameStop’s stock price between May 13 and June 13 by quietly accumulating shares and options, then posting on social media.
• Gill reportedly owns 9 million GameStop shares as of June 13, after selling 120,000 call options.
• The lawsuit claimed Gill’s actions caused GameStop’s share price to fluctuate wildly, generating profits for him at the expense of other investors.
• On Monday, July 1, Gill disclosed a 6.6% stake in Chewy Inc., causing its shares to spike.

A lawsuit accusing Keith Gill, the popular stocks influencer known as “Roaring Kitty” and “DeepF***ingValue,” of engaging in a “pump and dump” scheme involving GameStop Corp. shares was withdrawn just days after its filing.

The case, which briefly captured the attention of the financial world, highlights the ongoing saga of meme stocks and the power of social media influencers in the stock market.

On Friday, July 1, 2024, GameStop shareholder Martin Radev filed a proposed class action lawsuit in Brooklyn, New York federal court. The suit accused Gill of securities fraud, claiming he sought to manipulate GameStop’s stock for his own gain.

However, by Monday afternoon, Radev had voluntarily dismissed the lawsuit without prejudice, meaning he retains the right to file the suit again in the future.

The short-lived legal action alleged that Gill, who gained fame during the 2021 meme-stock craze, had quietly acquired 120,000 call options in GameStop before he began posting about the company in May 2024. According to the complaint, GameStop’s stock price, which had been trading around $17, soared to $48.75 on May 14 following Gill’s social media activity.

The lawsuit claimed that on June 2, Gill revealed ownership of 5 million GameStop shares and 120,000 call options set to expire on June 21. By June 13, Gill’s holdings had reportedly increased to more than 9 million shares of GameStop with no outstanding call options.

The suit alleged that Gill “quietly sold and/or exercised (i.e., dumped) all 120,000 of his GameStop call options for a large profit, seemingly to increase his own stake in GameStop stock by over 4 million shares.”

Radev’s complaint argued that Gill, as a former financial analyst, should have disclosed his large stake in GameStop sooner. The lawsuit claimed that Gill’s actions caused the stock price to fluctuate wildly, potentially harming other investors who bought securities at inflated prices during his alleged scheme.

Despite the lawsuit’s withdrawal, the incident has reignited discussions about the influence of social media personalities on stock markets. Gill, who amassed more than a million followers across his “Roaring Kitty” YouTube channel and “DeepF***ingValue” Reddit page, reemerged in May 2024 after a three-year hiatus from social media. His return and subsequent posts about GameStop were enough to cause significant movement in the stock’s price.

While the recent price movements were less dramatic than during the 2021 meme-stock frenzy, when GameStop surged more than 1,700% during one stretch in January, they still demonstrate the ongoing impact of social media on stock market dynamics. The 2021 event appeared to pit individual investors against hedge funds that were heavily shorting the troubled mall retailer.

On the same day the lawsuit was withdrawn, Gill disclosed a 6.6% passive stake in Chewy Inc., an online pet food and product retailer.

This disclosure came through a filing with the U.S. Securities and Exchange Commission and followed a cryptic post by Gill on the social media platform X (formerly known as Twitter) featuring a photo of a puppy.

The news sent Chewy’s shares spiking as much as 10%, briefly pushing the stock to a one-year high.

This latest development with Chewy demonstrates Gill’s continued influence in the stock market, even as legal questions swirl around his activities. It also underscores the ongoing phenomenon of meme stocks and the power of retail investors coordinating through social media platforms.

The post GameStop Investor Withdraws Lawsuit Against “Roaring Kitty” Keith Gill appeared first on Blockonomi.