Roaring Kitty Has Returned. Does Anyone Care?
It seems like they don't
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Roaring Kitty has returned. Well, at least the account called Roaring Kitty has started tweeting again. It seems to only want to tweet movie clips insinuating a few things:
I’m back
It is time to try another short squeeze. So join me?
And…that is about it. This is not like the Roaring Kitty from the past who would post videos and add fundamental analysis to his thoughts.
Why now? Why try a GameStop short squeeze after three years out of the blue?
There may be a court case in Texas that can explain the timing. From the Money Stuff column back in March:
“In 2022, federal prosecutors and the US Securities and Exchange Commission brought securities fraud charges against a group of people who allegedly did pump and dumps using Twitter, Discord and a podcast. We talked about the case at the time. It was typically silly: The defendants went by online nicknames like “MrZackMorris” and “Mystic Mac” and “The Stock Sniper,” the podcast was titled “Pennies: Going in Raw,” the SEC complaint had pictures of a Lamborghini, and the defendants were publicly saying things like “I’ll never get sick of pumping ... money into my followers bank accounts. LETS ALL GET RICH!” while they were privately saying things like “We’re robbing f*cking idiots of their money.”
Apparently, a judge ruled that these people did not break the law. Yup, you read that right. The opinion said that it is not an illegal pump and dump that constitutes securities fraud if you do not directly sell the stock to the people you defrauded.
Wonderful! Now it is open season to lie about a stock repeatedly, dupe ignorant/dumb people into buying it, and then dump it for a profit. No reason society shouldn’t penalize this behavior. None.
There is no proof today, but I have a hunch this account is not the old Roaring Kitty (Keith Gill). It could have been sold or hacked by these shady groups that run criminal (well, I guess previously criminal now) pump-and-dump groups.
And with the account simply posting videos that are not directly saying to do anything with GameStop, there doesn’t seem to be anything illegal going on here (disclaimer: I am not a lawyer).
Here’s another thing, though: does anyone even care? Roaring Kitty’s account is going viral with every tweet it makes. And yet, GameStop is only up 150% in the last few trading days.
That’s all they got? Portnoy seems to have traveled the degenerate gambler path in just two days time, embarrassing himself in the process. Is it already over?
I don’t know…PERHAPS it is a good time to be cautious with your portfolio.
Now is the time to be defensive, focus much more on valuation and capital returns, and buy safe stocks to ride out any mania. We even see Druckenmiller doing this as he trims his huge win in Nvidia.
My take is that there will be much more anticipation for a return of the meme stocks compared to actual meme stock mania. I wouldn’t be surprised to see these stocks become irrelevant by this time next week.
UPDATE BEFORE PUBLISH
The above section was written on Tuesday, May 14th. Turns out it is mostly coming true with GameStop giving up most of its meme gains in recent trading days.
Shares are still up 100% in the past month:
The insane conspiracy theories will remain, of course, but they never left. Google MMTLP and you’ll know what I’m talking about.
Remember the five laws of human stupidity from Carlo Cipolla:
Everyone always and inevitably underestimates the number of stupid people in circulation
The probability that a person is stupid is independent of any other characteristic of that person
A stupid person is a person who causes losses to another person or group of people when he or she does not benefit and may even suffer losses
Non-stupid people always underestimate the destructive power of stupid individuals
A stupid person is the most dangerous type of person
I think this describes meme stocks pretty damn well.
Obviously, this prediction could look pretty stupid in a week (ha). I have no money betting on these stocks in either direction, so I don’t really care.
Although, it would be quite hilarious if the meme crowd kept interest rates higher for longer.
Look, the short sellers aren’t going to get caught in such a bad position again. The companies have ATM offerings that will add more selling pressure to raise capital. Young dudes aren’t sitting around bored with a bunch of stimulus checks, they are watching the NBA Playoffs. It is hard to envision meme stocks getting as crazy as last time.
But maybe I’m just the stupid person here.
Hope everyone survived this earnings season. Remember, just because shitcos are rallying for six months doesn’t mean you have to race to catch up with them.
Don’t let the fact other people are making money in stupid ways make you do stupid things. That has no effect on your life or your portfolio.
“Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?” - some dead philosopher from Nebraska
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