Following GameStop action during Roaring Kitty livestream – MASHAHER

Though Keith Gill is going live on YouTube for the first time in nearly four years on Friday, the “Roaring Kitty” persona has held interest while he was offline.

Gill is credited with driving the retail trader GameStop mania during the pandemic. The investor hosted three-hour livestreams in August 2020 explaining his thesis for why the video game retailer is a good pick.

This craze was documented in the 2023 movie “Dumb Money,” which starred Paul Dano as Gill alongside Pete Davidson and America Ferrara.

GameStop shares have been on a tear following Gill’s return to social media last month. Shares have surged nearly 60% since the start of June alone, after more than doubling in value over the course of May.

— Alex Harring

Haven’t been following the return of Roaring Kitty or the impact on GameStop and other meme stocks? Here’s the essential reading from CNBC:

— Alex Harring, Yun Li

As of 11 a.m. ET, a hour ahead of the livestream, there were already more than 80,000 people waiting on Gill’s YouTube page for the kickoff.

This would be Roaring Kitty’s first livestream in more than three years. He used to host these frequently in August 2020, talking about GameStop for as long as three hours.

— Yun Li

Ahead of the livestream Friday morning, GameStop released a surprise fiscal first-quarter earnings report, which was initially scheduled for the following Tuesday after the bell.

The firm showed no signs of an operational turnaround. The company posted net sales of $881.8 million for the period, down 29% from $1.237 billion a year prior. The sales decline was steeper than the two Wall Street analysts who cover the stock expected. Their estimates were in a range of $900 million to $1.09 billion per FactSet.

GameStop lost $32.3 million during the quarter, a narrower loss than the $50.5 million suffered in the year-earlier period.

The company also gave an update on its ongoing stock sales, saying it would sell an additional 75 million shares on top of the 45 million share sale it had announced in May that raised more than $900 million.

— Yun Li

Gill started posting screenshots of his E-trade portfolio holding since Sunday. He seemed to have held onto five million shares of GameStop common shares and 120,000 call options as of Thursday night.

The market value of his positions grew by more than $375 million from Sunday to Thursday night. Shares of GameStop plunged 20% Friday morning, which could make a dent in his paper profit.

Those call options, if exercised, could bring Gill’s stake in GameStop to 17 million shares, making him the fourth largest shareholder. If the stock returns to its May high of $64.83 per share, Gill’s position would then be worth more than $1 billion (His cost to acquire such a stake this way would be $421.4 million.).

The call options against GameStop he owns has a strike price of $20 and they expire June 21. If the stock closes above $20 that day, Gill could exercise the options at $20 apiece, leaving him owning an additional 12 million shares.

Gill could also exercise before June 21, paying a premium. Additionally, he could roll those call options to a further expiration date to buy some time, but that could be a costly option.

Many believe if Gill starts to sell the options, it would be easy to spot given the size of the position and it would put big downward pressure on the stock.

He had paused posting updates during the week after The Wall Street Journal reported that Morgan Stanley’s E-Trade broker was considering booting him because of the worry that what he was doing could amount to market manipulation. 

— Yun Li