GameStop shares soar after "Roaring Kitty" reveals $116 million stake
GameStop stocks rose Monday following speculation that the man behind the meme-stock craze owns a large number of shares of the video game retailer that could be worth millions.
The company's stocks were up 25%, as of 11:28 a.m. Monday, hovering at around $29 a share.
Keith Gill, better known as "Roaring Kitty," posted a screenshot in the r/SuperStonk forum on Reddit that users on the platform are interpreting as an image of company stock and call options that Gill holds in GameStop. The image suggested Gill may own 5 million shares of GameStop that were worth $115.7 million as of the closing price on Friday.
In addition, Roaring Kitty on Sunday night posted a picture on X of a reverse card from the popular game Uno. There was no text accompanying the image.
"As a meme in pop culture, an UNO Reverse card acts as the ultimate comeback that flips the script on someone," according to WikiHow.
A former financial analyst at MassMutual, Gill is in late 2020 encouraged individuals on Reddit to invest in GameStop encouraged amateur retail investors to buy GameStop shares during the meme stock craze. He did this by posting on Reddit discussion boards and creating videos on YouTube about the strategy, gaining a large following in the process. But in 2021, Gill revealed that he had lost $13 million in one day from his investments in GameStop.
GameStop's stock jumped more than 87% in premarket trading and opened at $32.35 a share.
"If those gains hold, the stock would add around $8 billion to its market capitalization," said Nigel Green, the CEO of financial services firm deVere Group, in an email. "These super quick, super high, headline-grabbing figures are likely going to attract another huge wave of interest and, therefore, capital. I would not be surprised if the stock added $100 billion by the end of Monday due to the frenzy."
Gill's Roaring Kitty posts over the weekend comes about three weeks after he resurfaced online for the first time in three years. He did so simply by posting an image on the Roaring Kitty account on X of a man sitting forward in his chair, marking the end of a his hiatus. That post was followed by several others featuring various comeback-themed videos from movies along with charged music. His reappearance caused the price of GameStop to spike.
In 2021, GameStop was a video game retailer struggling to survive as consumers switched rapidly from discs to digital downloads. Wall Street hedge funds and major investors were betting against it, or shorting its stock, believing that its shares would continue on a drastically downward trend.
GameStop had experienced declining sales amid an industrywide pivot from game cartridges to video game streaming and digital downloads, but with the help of meme stock investors, last March the company turned its first profit in two years. Before then, the company had posted seven straight quarterly losses. This January, GameStop reported its first annual profit since 2018.
Last September, GameStop appointed Chewy founder Ryan Cohen as its new CEO. In its most recent quarterly earnings from March, GameStop said it eliminated an unspecified number of jobs to help reduce costs. The Texas-based company posted $1.79 billion in revenue compared to $2.23 billion a year prior.
Gill was also slapped with a lawsuit in 2021, accusing him of profiting from "deceitful and manipulative conduct" in promoting the GameStop shares. After appearing before Congress to explain the meme-stock phenomenon, his social media presence dwindled to nonexistence.
—The Associated Press contributed to this report.
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Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
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