| The Enterprise
BROCKTON — A surge in GameStop stock once led by a city native may be happening again after the company’s shares have fallen since early February.
The video game company’s stock opened at $44.70 on Wednesday but had more-than tripled to an opening of $169.56 on Thursday morning. It reached a Thursday high of $184.64 as of the early afternoon, but was fluctuating greatly.
Thursday morning was the stock’s best opening day since Feb. 1, when it was going for about $316 a share. The stock’s height during the surge came on Jan. 27 at $380 a share.
Last month, GameStop saw a rally driven by Reddit users on the forum r/wallstreetbets, which included Brockton native Keith Gill. He is known online as “Roaring Kitty” and “DeepF—ingValue” and has made videos about investing and his position on GME, the stock ticker for GameStop.
In Brockton, Gill is known as a graduate of the city’s high school and was a track and field athlete. He went on to attend Stonehill College in Easton where he ran cross-country and indoor and outdoor track and field.
As a result of retail investors buying GME and driving its price up, some short sellers had to buy it back, which put pressure on other short sellers and caused the price to increase more.
Gill’s initial $53,000 investment became worth millions.
“We had nowhere close to a million dollars,” he said in a YouTube video posted on Christmas. “It has brought me tremendous joy to share in what has turned out to be somewhat of a case study.”
The recent increase for GME has even left some members of r/wallstreetbets confused.
“Can we honestly sound off on what we think is happening?” wrote one Redditor. “Is there any reason for this 150% spike??” asked another.
Gust Kepler, CEO of stocks and options platform BlackBoxStocks, said that he became aware Wednesday afternoon of “aggressive buying” of call options on GME shares — the right to buy a stock at a certain price at a later date.
“I am not certain that there’s another short squeeze going on like the one before, however, there are probably some funds who stayed short assuming the dust would settle,” Kepler said.
Another possible reason for GameStop’s sharp move is the Wednesday announcement that its chief financial officer Jim Bell will resign on March 26.
Some of the traders were optimistic about the company’s new board member Ryan Cohen, the founder of online pet store Chewy, that would he would help turn GameStop around.
Some market watchers speculated that GME’s moves were a reaction to comments from Charlie Munger, Warren Buffett’s right-hand man.
Speaking at the annual meeting of Los Angeles Daily Journal Wednesday, the Berkshire Hathaway vice chairman blamed the stock frenzy on small investors that he said were gambling on the stock market.
GameStop’s stock prices have gained attention from Congress, which held a hearing last week to look into what led to the rally and whether smaller investors need to be protected from taking big risks.
Gill joined CEOs from Robinhood, the application many retail investors have used to invest, Reddit and hedge funds involved with GME investing to testify before the committee.
He testified that investing is something he was interested in and devoted his own time to as a way to increase his family’s savings.
During the holidays, Gill said he visited his family in Brockton and told them that they were millionaires. It was good news to share, especially after a difficult year for the family, which included the death of his sister Sara.
“That money will go such a long way for my family,” he said in his written testimony for the U.S. House Committee on Financial Services. “I am grateful to be able to give back to my community and to support my family, most of all my wife Caroline who has stuck with me through very tough times.”
Gill is also facing a class action lawsuit brought by investors who lost money when they purchased GameStop shares while its prices were inflated.
The lawsuit alleges that he manipulated stock prices through his videos and posts on social media and that his former employer, MassMutual and MML Investor Services, should have better supervised Gill. Gill, in his testimony for the financial services committee, said his job was to develop financial education classes that advisors could present to prospective clients. He said he never sold securities or was a financial advisor.
Material from the Associated Press and USA TODAY was used in this report.
Staff writer Mina Corpuz can be reached by email at firstname.lastname@example.org. You can follow her on Twitter @mlcorpuz. Support local journalism by purchasing a digital or print subscription to The Enterprise today.