GameStop shares soared after Roaring Kitty received a large stake

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GameStop shares jumped as much as 75% on Monday after a Reddit post showed that Keith Gill, the “meme stock” investor also known as Roaring Kitty, had built a position in the gaming retailer. video game in trouble worth $260. mn at the end of the transaction.

The sharp increase came after Gill’s account, called DeepFuckingValue on Reddit, posted a photo late Sunday showing he had taken shares and options positions in the retailer. GameStop jumped to more than $40 a share shortly after the open in New York but then fell slightly to close at $28, up 21% on the day.

Sunday’s screenshot said Carry holds 5 million shares of the company, purchased at $21.27 each and valued at $140 million at Monday’s close. It also shows 120,000 call options, which give the holder the right to buy additional shares at $20 each.

The options, which expire on June 21, are worth $120 million after Monday’s transaction – and would cost holders $240 million to exercise the options in full. A second screenshot shared on Reddit on Monday afternoon appears to show a paper profit of more than $85 million from Gill’s recent GameStop trades.

The day trader was at the center of a meme stock craze in 2021, as his social media posts encouraged millions more to rush into the stock and pressed hedge funds to bet on the stock prices decreased. After three years of silence, Gill reappeared last month on social media site X, sending GameStop shares soaring again, though the rally quickly faded.

Monday’s move shows that “there is still huge demand [among the retail crowd] Kevin Gordon, senior investment strategist at Charles Schwab, said for this stock, it’s either good or bad.

GameStop stock price line chart ($) shows GameStop's May rally ended before Gill's Reddit post on Sunday

According to data from S&P Global Market Intelligence, about 15% of GameStop’s outstanding shares were on loan — a rough proxy for short-term interest — as of Friday’s close, down from just over 25% at the end of May. “During Asian and European trading hours to date, additional lending is happening very little,” S&P Global said.

After GameStop’s shares soared last month, it raised $933 million from selling new shares. The company is scheduled to report first-quarter results on June 11. Net sales are expected to decline about 25% year-over-year, according to preliminary results released Dad in mid-May.

The percentage of outstanding shares on loan chart shows that short interest in GameStop has decreased significantly since the beginning of 2021

On Monday, GameStop was trading at more than 2,300 times next year’s estimated earnings per share, Bloomberg data showed. The company added nearly $4 billion to its market value in early trading.

Monday’s pre-session rally drew hundreds of compliments for Gill on social media, with one widely shared post on X describing him as “one of the great traders.” greatest of all time”.


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