Keith Gill, one of the most influential voices in the online community of GameStop bulls, is set to tell Congress that he thinks the market is still undervaluing shares of the game-seller.
Gill, better known by his online handles Roaring Kitty and DeepF__ingValue, is scheduled to testify at a House Financial Services Committee hearing Thursday.
“GameStop’s stock price may have gotten a bit ahead of itself last month, but I’m as bullish as I’ve ever been on a potential turnaround,” Gill says in his prepared testimony. “In short, I like the stock.”
Gill will testify that he invested in the company because he believed the market had overrated the chances that the company would go bankrupt and underrated its prospects for a turnaround.
“I believed the company was dramatically undervalued by the market. The prevailing analysis about GameStop’s impending doom was simply wrong,” he is set to testify.
Gill probably will not wear the headband he’s been known to wear on his Roaring Kitty YouTube channel. And he will not be allowed to eat chicken tenders or dip them in prosecco. But apart from that, his testimony will strongly resemble his Youtube content. That is, it is mostly focused on why he thinks GameStop is such a great investment opportunity.
From Gill’s testimony:
GameStop, the only major retailer dedicated to gaming, has over 60 million members in its loyalty program and continues to maintain a sizable market share within the gaming industry. Its legacy business, comprised primarily of selling physical video games and related equipment within their stores, was likely to generate meaningful cash flow following the release of new gaming consoles in late 2020. I grew up playing videogames and shopping at GameStop, and I’m looking forward to buying a new console at GameStop. I knew the company had an opportunity to reinvigorate this business by improving customer service for gamers, upgrading its online presence, and offering complementary product lines such as PC gaming and accessories.
Second, I believed – and I continue to believe – that GameStop has the potential to reinvent itself as the ultimate destination for gamers within the thriving $200 billion gaming industry. The new console cycle provides GameStop a unique opportunity to pivot from a traditionally brickand-mortar mindset toward a technology-driven business that excels in gaming products, experiences and services. By embracing the digital economy, GameStop can pursue new revenues streams including larger gaming catalogs, digital content and community experiences, online trade-ins, streaming services, and Esports.
In the testimony, Gill claims he took to social media to talk about his investment ideas not to influence the price of the stock but in hopes of helping others and being challenged by other finding problems with his ideas.
“I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel,” Gill says in the testimony. “Whether other individual investors bought the stock was irrelevant to my thesis – my focus was on the fundamentals of the business.”
Gill also shares some personal information:
Ultimately my GameStop investment was a success. But the thing is, I felt that way in December far before the peak, when the stock was at $20 a share. I was so happy to visit my family in Brockton for the holidays and give them the great news – we were millionaires. That money will go such a long way for my family. We had an incredibly difficult 2020. In addition to dealing with COVID, we lost my sister Sara unexpectedly in June. It brought me tremendous joy to share good news with my family for a change. 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.
“As for what happened in January, others will have to explain it,” his testimony says.
Gill’s latest Reddit post indicated he made about $7.5 million on his GameStop investment. Shares of GameStop were trading around $45 on Wednesday closed at $45.94 on Wednesday, far below the $483 high it hit weeks ago but around 170 percent higher than its level at the start of 2020.
A class-action lawsuit against Gill was filed on Tuesday alleging that he had engaged in securities fraud in touting the stock. The lawsuit claims that Gill was a licensed professional investor posing as an amateur.
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