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GameStop Shares Soar After ‘Roaring Kitty’ Reveals $175 Million Bet on Retailer
GameStop (GME) shares rose 21% on Monday after user “DeepF***ingValue, an account believed to be linked to individual investor Keith Gill – who started the meme stock rally in 2021 – posted a screenshot on Reddit on Sunday night that purported to show that they paid nearly $175 million to build a position in the video game retailer.
GameStop gained as much as 75% at market open before paring gains throughout the session. Shares closed at $28 apiece on Monday.
Gill is also known as Roaring Kitty on X and YouTube. The user posted the screenshot on Sunday night on Reddit’s Superstonk subreddit.
The screenshot showed holdings of 5 million GameStop shares purchased at an average price of $21.274, a position valued at $115.7 million at Friday’s closing price of $23.14. GameStop shares traded at $38 each in early trading Monday before being temporarily halted due to volatility.
The account also appears to hold 120,000 options contracts that expire on June 21. These contracts give the right to buy GameStop shares for $20 each, a position valued at $65.7 million at Friday’s close.
Steve Sosnick, chief strategist at Interactive Brokers, warned investors against stalking.
“Is whoever controls this account doing this in your best interest or their best interest? And really, you should think carefully about this because, to me, it’s [is] pretty obvious whose interest it is,” Sosnick told Yahoo Finance on Monday.
“If you are chasing the stocks here, you are more likely to be the source of liquidity for whoever is controlling this account to sell to your enthusiasm.”
A screenshot that appears to show GameStop holdings by “DeepF***king Value” was posted to Reddit on the evening of Sunday, June 2, 2024. (Source: Reddit)
Monday’s surge comes after GameStop rose 180% in a two-day period in mid-May following “Roaring Kitty.” first posted on X, formerly known as Twitter, since 2021.
Last month’s demonstration was short-termhow analysts warned about the meme action this time went too far of the level of retail entries observed in 2021.
Still, GameStop capitalized on May’s rally. Last month, the company sold 45 million shares, generating around US$930 million in revenue. Shares rose 25% on the news.
Typically, investors would expect the share price of a company that issues new shares — which dilute the value of current holdings — to decline after a share sale.
AMC (AMC) also capitalized on the meme frenzy, raising $250 million by selling 72.5 million shares last month. AMC shares rose 11% to close at $4.81 each on Monday.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre.
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