GameStop tumbles 40% as ‘Roaring Kitty’ trader says little new about retailer on livestream

GameStop was down by 40% near session lows around $28 apiece, but the stock is still in the money for Gill to exercise his call options. He has 120,000 call options against GameStop with a strike price of $20 that expires June 21.

The notional value, if exercised, would be $240 million worth of stock bought at $20. That means Gill needs to have $240 million to take custody of the stock after exercising the calls,

— Yun Li

Roaring Kitty ended his livestream after about 50 minutes. Trading in GameStop was halted multiple times during the stream.

“Cheers y’all. I’ll see y’all around,” Gill said.

— Yun Li

As the livestream ended, GameStop shares were down more than 40%.

If that holds through the session close, it would mark the stock’s biggest one-day loss since Feb. 4, 2021, when shares tumbled more than 42%. It would also be GameStop’s fourth worst day in history.

— Alex Harring

Roaring Kitty’s livestream sent other meme stocks lower while his livestream took place on Friday.

Shares of AMC Entertainment sank around 14% during the stream. The stock is down nearly 19% so far this year.

— Sean Conlon

Gill said he does not have a lawyer in the room with him while livestreaming.

“No, but maybe I should,” he said, appearing to respond to a question coming into the stream’s live chat.

— Alex Harring

Roaring Kitty revealed that the GameStop positions he had shown in screenshots — five million common shares and 120,000 call options — are his only bets in the portfolio.

“My aggressive style of investing is almost certainly not suitable for y’all,” he said.

— Yun Li

Gill said GameStop is in the second part of his thesis, which includes a reinvention.

“We’re in that second part of it here,” he said.

Gill said there’s an “overemphasis” on the video game retailer’s legacy business. Meanwhile, he said the second stage becomes a “bet” on CEO Ryan Cohen and other management, a group he said is what people should focus on.

In one mention of Cohen, Gill said the chief executive’s first and last name with an expletive in between.

— Alex Harring

Gill clarified that his positions in GameStop are his only and that he doesn’t have any institutional backers.

“Those are my positions. I’m not working with anybody else, with hedge funds. … I gotta hop on the stream and just remind people you know … I’m not an institutional investor,” Gill said.

Many, including Andrew Left, had speculated that Gill now could have support from big investors because of the sheer size of his positions.

— Yun Li

Gill said he hasn’t seen “Dumb Money,” the movie chronicling the GameStop meme mania.

“I still haven’t seen that movie,” he said, but admitted he’s “seen some clips.”

— Alex Harring

As Gill began his stream, he acknowledged that he has no set agenda.

“No real game plan here,” Gill said, with an intraday chart of GameStop behind him. “Just wanted to hop in and see what’s poppin’.”

More than 600,000 viewers were tuned in as of shortly after 12:30 p.m. ET.

— Alex Harring

Keith Gill, better known as “Roaring Kitty,” began his much-anticipated livestream wearing an arm sling and bandages on his head and face. To be sure, he indicated he was just “messing around,” pretending to be injured.

— Fred Imbert

At 12:25 p.m. ET, the livestream commenced. More than 400,000 viewers are tuned in for the stream, which was slated for noon ET.

— Alex Harring

Roaring Kitty has yet to start the livestream as of 12:05 p.m. with well over 400,000 people waiting on his YouTube page.

Meanwhile, shares of GameStop were halted for volatility, trading down 24.6%.

— Yun Li

Shares of GameStop were down more than 20% as traders awaited “Roaring Kitty’s” livestream. Despite the move lower, the stock remains more than 60% higher for the week.

— Fred Imbert

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 Ferrera.

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