GameStop shares surged more than 70 per cent premarket on Monday after “Roaring Kitty” Keith Gill, the stocks influencer behind the 2021 retail trading frenzy, returned to Reddit with a post showing a US$116 million bet on the embattled videogame retailer.
The stock briefly doubled in value to US$46.90, with roughly US$1.1 billion worth of shares changing hands by 8:15 a.m. ET (1215 GMT), second only to the US$1.6 billion in Wall Street favorite Nvidia, according to LSEG data.
It was the first post in three years from Gill’s Reddit account, where screenshots of his bullish GameStop trades triggered a rush of demand in 2021 for “meme stocks” – often companies with weak fundamentals that gained a cult-like following through social media hype.
The screenshot posted on Sunday showed a GameStop holding of 5 million, or 1.8 per cent of its publicly available stock. Gill’s last post from April 2021, titled “final update,” showed a holding of 200,000 shares worth US$30.9 million.
Sunday’s post also revealed US$65.7 million worth of call options expiring on June 21 at a strike price of $20.
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The stock wrapped up a volatile month at $23 on Friday, about 33 per cent higher since Gill began sharing cryptic posts and memes from his “Roaring Kitty” account on X.com in May, sparking speculation over whether he would resume sharing his trades online after the hiatus.
“Keith Gill is putting his money where his tweets are, and some investors are clearly following his lead and rekindling interest in meme stocks,” said Ben Laidler, global markets strategist at digital brokerage eToro.
“This is having a disproportionate share price impact given the short position in the stock combined with its relatively small market capitalisation.”
GameStop was trending no. 1 on investor-focused social media platform stocktwits.com, indicating increased chatter among individual traders. Fellow meme stock AMC added 26 per cent, while Tupperware, SunPower Corp and U.S.-listed shares of BlackBerry rose between six per cent and 13 per cent.
Monday’s surge also put GameStop short sellers on track to rack up nearly US$1 billion in paper losses, according to data and analytics firm Ortex Technologies.
Reuters could not verify the screenshot and Gill did not respond to a request for comment on Reddit or email.
Reddit shares jumped 5.6 per cent, while retail trader-focused brokerage Robinhood gained 3.3 per cent.
GameStop raised $933 million by selling shares to cash in on a meme stock rally last month.
The $7 billion company has been grappling with slowing sales as its core business of selling new and pre-owned videogame disks takes a hit from consumers moving to downloading games digitally or streaming.
It is expected to post first-quarter results on June 11.
The company warned in May its first-quarter net sales would drop to between $872 million and $892 million, from $1.24 billion a year ago.
(Reporting by Medha Singh and Amanda Cooper; Editing by Varun H K and Devika Syamnath)