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One Redditor had to testify for Congress regarding the GameStop stock price increase. Here's why people are suspicious of him now.

Wall Street Bets: Investigate the lawsuit against this cunning Redditor

Most people have tuned out from GameStop’s stock price after dropping to $40 per share at the time of writing this from its high of nearly $500. However, the saga is still going. Congress began its hearing on market manipulation between hedge funds and the subreddit Wall Street Bets. 

Despite the hearing, Wall Street Bets member Keith Gill, or DeepF**kingValue as he’s known on Reddit, is being sued by Christian Iovin, a Washington state investor who also got caught up in GameStop’s price hike frenzy. Here’s a breakdown between the lawsuit and the Congress hearing.

The lawsuit 

Christian Iovin, through Hagens Berman law firm, is suing Keith Gill for punitive damages in relation to Gill’s role in GameStop’s stock price skyrocketing in late-January. The law firm accused Gill of exaggerated and deceitful social media posts to manipulate  GameStop’s stock price for personal gains. 

According to the lawsuit, “Gill’s deceitful and manipulative conduct not only violated numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GameStop shares.”

The lawsuit claims Gill ran a calculative social media campaign to manipulate retail investors. It also claims he used multiple social media accounts to promote his ideas and misrepresented himself as a “Robin Hood” figure, and characterized hedge funds as the villains.

The Congress hearing

Congress is investigating what made GameStop’s stock price so volatile. The big question is: was their wrongdoing from either side? Hedge funds accuse Redditors of market manipulation. Redditors and retail traders accuse the hedge funds and Robinhood of market manipulation by working together to prevent them from trading GameStop.

Keith Gill wasn’t the only member on the hearing panel of Congress. Chief Executives from Reddit, Robinhood, and the hedge funds Citadel and Melvin Capitol. Congress plans to have more hearings as it looks for more details into what happened. Panelists, especially Robinhood CEO Vlad Tenev, were quick to dodge questions and failed to elaborate on what happened.

Where does Kieth Gill and Wall Street Bets fit in?

Gill’s posts about GameStop started the frenzy. In his written testimony, which he posted on Feb. 17 ahead of the first hearing, he explained he never solicited anyone to buy GameStop stock, nor was he working with a group to move the price.

Gill does have a history of working in the financial sector, but, he noted, never as a stockbroker or financial advisor. According to his written testimony, MassMutual employed him to develop financial education classes that advisors could present to prospective clients. 

“Like many people, sometimes I post on social media my thoughts and analysis about individual stocks and whether they are correctly valued. I did that with GameStop. I believed the company was dramatically undervalued by the market. The prevailing analysis about GameStop’s impending doom was simply wrong,” Gill wrote.  

Gill uses publicly available information to make decisions on the stock. He never claimed to have insider information. He posted his analysis of GameStop because he felt confident in it and was willing to accept losses from investment and anyone to poke holes in it so he could make it stronger. He never expected it to galvanize retail investors in the Wall Street Bets community to purchase large quantities of GameStop.

Did Keith Gill manipulate Wall Street Bets users?

As he noted to Congress on Thursday and on his YouTube Channel, his investment strategy is aggressive and not suitable for everyone. However, he would still invest in GameStop even at its current valuation. However, the lawsuit Gill faces uses his past employment at MassMutual to insinuate he was a professional passing as an amateur investor. 

Honestly, his analysis is pretty sound. GameStop is a legacy brand and even he remembers frequenting it as a kid for the latest video games and consoles. He believed GameStop could reinvent themselves as they still have over 60 million loyalty program members. 

He also notes the gaming industry is worth over $200 billion, and the company is only at the cusp of unlocking its true potential away from the brick and mortar stores. The analysis is contrary to what many professional investors believe as they see the company’s bankruptcy imminent. Gill never told anyone on Wall Street Bets to buy GameStop stock, but gave reasons why he was.

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