Popular meme stock trader “Roaring Kitty” botched a highly anticipated live YouTube broadcast, failing to halt the sell-off in GameStop shares sparked by the video game retailer’s dismal earnings release.
Meme stock influencer Keith Gill (also known on Reddit by the handle “DeepF—–gValue”) acknowledged his status as a major GameStop shareholder during a YouTube livestream, posting a chart showing that he owns 5 million shares and 120,000 call options on the company.
“My aggressive investing style is probably not for you,” Gill told his followers on Friday, wearing his trademark headband, sunglasses and sipping a large, unnamed drink.
But Gill said little beyond what was already known in an effort to prevent a sharp drop in the stock price on Friday, and made matters worse when he showed up 30 minutes late to his own event, keeping half a million viewers waiting.
“That’s my position. I’m not working with anyone else, with hedge funds,” Gill said, an oblique reference to speculation that recently resurfaced after three years of silence that the company was backed by large institutional investors.
“I want to come on stream and remind everyone,” Gill said. “I’m not an institutional investor.”
The company’s shares soared about 50% on Thursday on news of the livestream.
But GameStop revealed a weak earnings report on Friday morning that was rushed to investors ahead of its planned release next Tuesday.
The results were disastrous, and stock prices fell again.
While GameStop managed to narrow its first-quarter losses, the video game retailer’s revenue fell due to weak sales of hardware, accessories, software and collectibles.
Gill expressed confidence in GameStop CEO Ryan Cohen during the YouTube broadcast, which showed a real-time chart showing GameStop’s stock price falling further as Gill continued to speak.
GameStop shares were down more than 40% as of 2:15 p.m. ET following a frenzy earlier this week that was reminiscent of the market-shaking trends in 2021 driven by individual investors.
Despite Friday’s decline, GameStop shares are still up about 100% since the beginning of the year.
Roaring Kitty’s position was solidified by a $174 million investment disclosed Monday.
Hours later, a surge in stock prices pushed the value of his holding to $586.4 million.
Gill’s trading practices have reportedly come under intense scrutiny from retail trading firms.
The Wall Street Journal reported on Monday that E*Trade is considering banning Gill from using its platform after his recent purchase of GameStop Corp. shares raised concerns about possible stock price manipulation.
Mr. Gill bought a large amount of GameStop options on ETrade just before reigniting the meme-stock boom in May, The Wall Street Journal reported, citing people familiar with the matter.
E*Trade’s parent company, Morgan Stanley, declined to comment.
GameStop Corp. lost $32.3 million, or 11 cents per share, for the quarter ended May 4.
The company reported a loss of $50.5 million, or 17 cents a share, a year earlier. Adjusted losses were 12 cents a share.
Quarterly sales fell to $881.8 million from $1.24 billion in the same period last year.
The company had been scheduled to release quarterly earnings on Tuesday but announced Friday that it would not hold a conference call to discuss its financial performance.
Despite Friday’s drop, GameStop shares are still up about 65% since Jan. 1.
GameStop has also filed paperwork with securities regulators to sell up to 75 million shares.
GameStop noted in the filing that from Feb. 4 through June 6, the closing prices of its shares ranged from $10.01 to $48.75, with daily trading volume ranging from 1.7 million shares to nearly 207 million shares.
“During the period in question, the Company did not experience any material change in its financial condition or results of operations that would explain such price fluctuations or trading volumes.”
As far back as January 2021, “the market price of our common stock has experienced extreme price volatility that did not appear to be based on the underlying fundamentals and operating performance of our business.”
With post wire
