A Reddit user who made $48 million in GameStop call options during last week’s Reddit-fueled rally claims he lost $19 million when the stock nosedived on Monday and Tuesday.
Keith Gill, 34, who goes by the Reddit username @DeepF—ingValue, says he will hold onto his shares even after the stock lost 80% of its value in 3 days.
Gill started investing $53,000 in GameStop stock last year when he noticed the video game retailer was being heavily shorted by hedge funds. Hedge funds earn millions of dollars by betting that a company’s stock price will drop.
Gill earned a quick $48 million during last week’s historic rally, but it took less than 2 days for him to lose $19 million.
According to the Wall Street Journal, Gill is an investor who previously worked in marketing for an insurance company.
Reddit users teamed up to send GameStop stock soaring from $36 to $483 a share. But the stock dipped below $80 a share by Tuesday afternoon.
Hedge funds, which lost billions during the GameStop rally, used a tactic called a “short ladder attack” which involves selling GameStop shares to each other at lower prices, thus tricking Wall Street’s algorithms into believing retail investors sold their shares at below market prices.
The ladder attack — which is illegal — caused the stock’s prices to artificially fall. Thousands of Reddit users lost their stock gains and their life savings in 2 days.
Billionaire Mark Cuban participated in an “Ask Me Anything” session on Reddit.com on Tuesday afternoon to calm panicked investors who lost everything.
During the AMA session, Cuban urged investors not to sell their GameStop shares because the low stock price is artificial and only temporary.