I did a little experiment with a spreadsheet this evening that I wanted to share. It has to do with this carnival barker - Roaring Kitty - who has dragged his willing acolytes into GameStop positions, most of which are showing terrible losses.
In the wee hours of last Friday, the web was going crazy with people excitedly talking about how their hero, the aforementioned kitty, was going to be a billionaire. (Well, not really, as I've written about, since he'd had to give up over 50% of those proceeds in taxes, but I digress). The stock got up to almost $68, but to make the math simple, let's go with $70. There obviously was not options quote in the middle of the night, but I've put a plausible bid/ask in there with the assumption that the stock was still trading at $70. Thus...........a billion bucks in GME positions.
This is fan fiction, however. GME didn't trade at $70 during normal hours. By the time Friday opened, the stock was already in a free-fall, and after the mentally impaired webinar that Roaring Kitty held during the trading day on Friday, the stock just kept weakening. I can only assume that his millions of followers are losing their minds (as well as their portfolios) since they were speaking seriously of pushing GME to $150 in the short-term.
The slippage kept going on Monday, and as of the close, the actual positions are worth about 80% less than the "wee hours Friday" peak value. In other words, he's down about $800 million.
Now, look, as much as a bonehead as this guy seems to be, the simple fact of the matter is that he's got more money than I'll ever see in my life, and good for him. I frankly think it was acquired through a once-in-a-lifetime confluence of very good luck and balls of steel, but those same balls of steel could easily take this $200 million down to $100 million. Keep in mind that these options expire next Friday, and as weak as the stock is, they may not even be in the money much longer.
Suffice it to say that all the breathless speculation on Thursday night about how this chap was going to have a billion bucks in his account simply isn't going to happen. What happens over the next two weeks with Roaring Kitty is going to be awfully interesting.
