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Shares in GameStop surged as much as 75 per cent on Monday after a post on Reddit purported to show that Keith Gill, the “meme stock” investor also known as Roaring Kitty, had built a position in the struggling video game retailer that was worth $260mn by the close of trading.
The sharp rise came after Gill’s account, which goes by the name DeepFuckingValue on Reddit, posted a picture late on Sunday that appeared to show he had taken a share stake and options positions in the retailer. GameStop leapt to just over $40 a share shortly after the New York open but later eased to close at $28, up 21 per cent on the day.
The Sunday screenshot indicated Gill held 5mn shares in the company, bought at $21.27 apiece, and worth $140mn at Monday’s close. It also showed 120,000 call options, which give the holder the right to buy further shares at $20 each.
The options, which expire on June 21, were worth $120mn after Monday’s trading — and would cost the holder $240mn to exercise in full. A second screenshot shared on Reddit on Monday afternoon appeared to show paper gains of more than $85mn on Gill’s recent GameStop trades.
The day trader was at the centre of the meme-stock mania in 2021, when his social media posts encouraged millions of others to pile into the stock and squeeze out hedge funds betting on a share price decline. After a three-year silence, Gill reappeared last month on social media site X, sending GameStop shares soaring again, though the rally quickly fizzled out.
Monday’s move suggested “there’s still huge appetite (among the retail crowd) for this stock, whether healthy or not”, said Kevin Gordon, a senior investment strategist at Charles Schwab.
About 15 per cent of GameStop’s outstanding shares were on loan — a rough proxy for short interest — as of the close of play on Friday, down from just over 25 per cent at the end of May, according to data from S&P Global Market Intelligence. “In Asian and European trading hours so far today there is very slim additional borrowing taking place,” S&P Global said.
After GameStop shares leapt last month, it raised $933mn selling fresh shares. The company is due to report first-quarter results on June 11. Net sales are expected to have dropped about 25 per cent year on year, according to preliminary results announced in mid-May.
On Monday, GameStop was trading at more than 2,300 times its estimated earnings per share for the coming year, Bloomberg data showed. The company added almost $4bn to its market value in early trading.
Monday’s pre-market rally elicited hundreds of fawning tributes to Gill on social media, with one widely shared post on X describing him as “one of the greatest traders of all time”.
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