‘Roaring Kitty’ sets off second explosion in GameStop share price

Bengaluru — GameStop shares surged more than 70% before the market opened on Monday after “Roaring Kitty” Keith Gill, the influencer behind the 2021 retail trading frenzy, returned to Reddit with a post showing a $116m bet on the embattled video game retailer.

The stock briefly doubled in value to $46.90, with roughly $1.1bn worth of shares changing hands by 8.15am in New York, second only to the $1.6bn in Wall Street favourite Nvidia, according to LSEG data. Soon after the open, it had trimmed gains to 50%.

It was the first post in three years from Gill’s Reddit account, where screenshots of his bullish GameStop trades triggered a rush of demand in 2021 for “meme stocks” — often companies with weak fundamentals that gained a cult-like following through social media hype.

The screenshot posted on Sunday showed a GameStop holding of 5-million, or 1.8% of its publicly available stock. Gill’s last post from April 2021, titled “final update”, showed a holding of 200,000 shares worth $30.9m.

Sunday’s post also revealed $65.7m worth of call options expiring on June 21 at a strike price of $20.

The stock wrapped up a volatile month at $23 on Friday, about 33% higher since Gill began sharing cryptic posts and memes from his “Roaring Kitty” account on X in May, sparking speculation over whether he would resume sharing his trades online after the hiatus.

“Keith Gill is putting his money where his tweets are, and some investors are clearly following his lead and rekindling interest in meme stocks,” said Ben Laidler, global markets strategist at digital brokerage eToro.

“This is having a disproportionate share price impact given the short position in the stock combined with its relatively small market capitalisation.”

GameStop was trending on investor-focused social media platform stocktwits.com, indicating increased chatter among individual traders. Fellow meme stock AMC added 26%, while Tupperware, SunPower and US-listed shares of BlackBerry rose between 6% and 13%.

Short sellers

Monday’s surge also put GameStop short sellers on track to rack up nearly $1bn in paper losses, according to data and analytics firm Ortex Technologies.

Reuters could not verify the screenshot and Gill did not respond to a request for comment on Reddit or email.

Reddit shares jumped 5.6%, while retail trader-focused brokerage Robinhood gained 3.3%.

In April, GameStop raised $933m by selling shares to cash in on a meme stock rally. The $7bn company has been grappling with slowing sales as its core business of selling new and pre-owned video game discs takes a hit from consumers moving to downloading games digitally or streaming.

It is expected to post first-quarter results on June 11. The company warned in May its first-quarter net sales would drop to between $872m and $892m, from $1.24bn a year ago.

Reuters