Meme stock trader Keith Gill, known as “Roaring Kitty,” failed to rally investors around GameStop during his first livestream in three years on Friday, as the stock experienced a significant slump, dropping 40%. This decline came after GameStop announced a share sale aimed at raising up to $3 billion. During the livestream, Gill addressed nearly 600,000 viewers on YouTube, encouraging them to trust CEO Ryan Cohen and his team, while also joking about memes and issuing warnings about the high risks involved in retail trading.
WATCH: Shares of GameStop dropped nearly 40% after the video game retailer announced a large stock sale to raise up to $3 billion. This came the same day meme stock influencer Keith Gill known as ‘Roaring Kitty’ held his first livestream in three years https://t.co/qPu8brDuIK pic.twitter.com/qqUgb431P5
— Reuters Asia (@ReutersAsia) June 8, 2024
Gill emphasized his aggressive investment style, cautioning that it might not be suitable for most viewers. His statements were delivered amidst significant market volatility, with GameStop’s stock plummeting to $28.24, a 39.16% decrease. Other stocks such as AMC Entertainment also saw declines, highlighting the continued interest of retail traders in high-risk investments driven by internet culture rather than traditional business metrics.
Before the livestream, GameStop’s stock had surged by 50% following the early release of its quarterly results, four days ahead of schedule. However, the announcement of the share sale led to a dramatic downturn. The erratic movement in stocks like GameStop and AMC Entertainment underscores the risky nature of investments driven by nostalgia and memes rather than solid business fundamentals.
Keith Gill, who goes by “Roaring Kitty,” earlier brought meme stock traders back to GameStop through cryptic posts on social media. In his first public appearance in years, he proved once again that his slightest online move can spark dramatic swings. https://t.co/19b1IT7XPx
— The Washington Post (@washingtonpost) June 8, 2024
Gill, wearing a headband and white sunglasses, commented on the power of memes and screenshots to drive investor behavior. Despite the stock’s volatility, he expressed confidence in Cohen’s ability to guide GameStop through what he termed a “transformation stage.” Gill refrained from making any promises but suggested that Cohen’s approach might be what the company needs in the long term.
In 2021, Gill gained fame for his advocacy of GameStop, which led to the stock soaring by up to 1,600% before it eventually crashed. This made him a hero to some retail investors and a nuisance to many on Wall Street. His recent livestream reflected his typical style, discussing the fundamentals of the stock, sharing memes, and engaging with his audience in a relaxed, informal manner.
During Friday’s trading, GameStop’s stock was halted multiple times due to volatility. Investors traded $10 billion worth of GameStop shares, making it one of the most traded stocks on Wall Street, alongside giants like Nvidia and Apple. Despite the drop in stock price, Gill maintained his belief in Cohen’s leadership potential.
GameStop’s first-quarter report revealed net sales of $881.8 million and a net loss of $32.3 million, a year-over-year sales decline of 28.7%, though the net loss showed improvement. The retailer also reported having $1.083 billion in cash, cash equivalents, and marketable securities. Additionally, GameStop announced plans to sell up to 75 million shares to raise capital, although no specific timeline was provided.
‘Roaring Kitty’ could not save GameStop as meme stock tankshttps://t.co/Hf0oQApxrA
— Alejandro Guillú Mendoza (@guillu) June 8, 2024
Last month, GameStop reported raising over $900 million from selling 45 million shares following a surge in meme-stock interest. This reflects the growing influence of retail traders who, according to Don Montanaro, president of discount brokerage Firstrade, are increasingly becoming a significant force in the market. Montanaro emphasized that public companies need to pay attention to the impact of retail investors, who now have a prominent place in market discussions.
Gill’s livestream and the subsequent market reactions underscore the continuing influence of meme stock culture and the volatility it brings. Despite the challenges, Gill remains a central figure in this movement, encouraging his followers to stay engaged while highlighting the inherent risks of such speculative investments.
Key Point:
- Keith Gill’s Livestream: Known as “Roaring Kitty,” Keith Gill held his first livestream in three years, urging nearly 600,000 viewers to bet on GameStop’s CEO Ryan Cohen and his team.
- GameStop’s Stock Plummet: GameStop shares fell by 40% after the company announced a share sale to raise up to $3 billion, leading to significant volatility and multiple trading halts.
- Investor Warning: Gill emphasized the risks of his aggressive investment style, warning retail traders that they could “lose it all.”
- Quarterly Results: GameStop reported $881.8 million in net sales and a net loss of $32.3 million for the first quarter, a year-over-year sales decline of 28.7%, but an improved net loss.
- Capital Raising Efforts: GameStop plans to sell up to 75 million shares to raise capital, following a previous successful share sale that generated over $900 million.
Kirk Volo – Reprinted with permission of Whatfinger News
