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GameStop Shares Jump After ‘Roaring Kitty’ Account Claims Stake
Article information
- Author, Natalie Sherman
- Role, New York business reporter, BBC News
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June 3, 2024
Meme stock favorite GameStop is rising again, after a social media post apparently from the investor known as “Roaring Kitty” claimed a sizable stake in the video game retailer.
The company’s shares opened for trading on Monday at prices above $40 each, up more than 70% from Friday, before retreating slightly later.
The rise followed a screenshot shared by the Reddit account linked to Keith Gill, claiming he owned 5 million shares in GameStop – almost 2% of the company’s shares – a stake worth more than $100 million (£ 78 million).
The post was part of a series over the past few weeks that followed a long period of silence on Roaring Kitty’s accounts.
The veracity of the post could not be confirmed. Neither Gill nor GameStop responded to emails seeking comment.
Gill became famous in 2021 for inspiring an army of online investors to back GameStop.
This led to an unexpected rise in the struggling company’s shares, creating financial pressure on professional Wall Street firms that had bet against the retailer.
A post from that year showed that Gill held about 200,000 shares, worth $30.9 million.
Shares of some other so-called meme stocks — whose rise and fall seem disconnected from business fundamentals — also rose on Monday, such as AMC and Blackberry.
Analysts argued that the original rise in meme stocks was driven by the increase in savings and time many families had during the pandemic, thanks to government support programs and the closure of many in-person activities.
With markets rising again this year, trading firms such as Charles Schwab and Robinhood have reported another increase in new accounts and activity from retail investors — people who don’t work for investment houses or other private companies.
GameStop cashed in on interest last month, raising $933 million in a share sale.
But the activity has been a source of some concern in the financial sector and in Washington, which hosted hearings on the GameStop phenomenon in 2021.
In an interview last month with business broadcaster CNBC, former financial regulator Jay Clayton, who led the Securities and Exchange Commission under former President Donald Trump, compared it to gambling.
“It bothers me on so many levels,” he said. “It’s much closer to gambling than trading and it’s certainly not an investment.
“Is this something we should tolerate in our markets?” he added.
“Whether it’s legal or illegal, I don’t think so.”