AP – The meme stock protagonist known as Roaring Kitty took to YouTube recently to tell his hordes of followers that he still believes GameStop’s management team can turn the struggling video game retailer around.
In a live stream that drew over 600,000 views Roaring Kitty, whose real name is Keith Gill, posted a screenshot of an E-Trade account that appears to show he continues to hold a sizeable investment in GameStop. But his remarks couldn’t keep shares in the company from plunging almost 40 per cent – a drag on the value of Gill’s investment and a warning about the unpredictability of meme stocks.
Gill’s appearance on YouTube came hours after the release of GameStop’s quarterly results, which showed the company’s turnaround has a way to go. GameStop managed to narrow its losses in the first quarter, but its revenue fell as sales weakened for hardware and accessories, software and collectibles. GameStop also filed paperwork with securities regulators to sell up to 75 million shares of stock.
Gill, who has experience as a licensed securities broker and financial wellness educator, was rambling and unfocused at times during his midday live stream, which ran for nearly an hour and marked his first YouTube video in more than three years.
“No real game plan here, just wanted to hop in, see what’s poppin’,” Gill said shortly after the start of the live stream. He appeared with his right arm in a sling and bandages on his head, face and clothes in an apparent reference to the beating GameStop’s shares were taking.
Gill at times reiterated his belief that GameStop Chief Executive Officer Ryan Cohen is taking the right approach to transitioning the company from a brick-and-mortar seller of video games and accessories to a successful online gaming company. GameStop and Cohen haven’t offered many details of the company’s turnaround plan, and Gill didn’t offer any ideas of his own.
All told, the company based in Grapevine, Texas, said recently that it lost USD32.3 million, or 11 cents per share, for the period that ended on May 4. A year earlier, it lost USD50.5 million, or 17 cents per share. Its adjusted loss was 12 cents per share. Quarterly sales dropped to USD881.8 million from USD1.24 billion a year ago. GameStop did not hold a conference call to discuss its financial performance.
As Gill’s live stream went on, GameStop shares sank further. The stock had been down about 20 per cent at USD37.29 per share shortly before noon Eastern time, when the live stream was scheduled to begin. It was down just over 40 per cent to USD27.65 per share shortly before Gill signed off with an “adios” and “peace!” followed by a short outro video of kittens.
The New York Stock Exchange paused trading in GameStop more than 15 times by early afternoon on Friday due to unusually high volatile trading in the stock.
Gill also asserted during the live stream that he was not working with a hedge fund or a large institution, a nod to speculation that he may now have the backing of deeper-pocketed investors.
He briefly displayed a screenshot of an E-Trade portfolio page showing holdings in GameStop that were down more than USD235 million as of Friday.
That activity came about three weeks after Gill appeared online for the first time in three years, spiking the price of GameStop at the time.
In May, the “Roaring Kitty” account posted an image on X of a man sitting forward in his chair, a meme used by gamers when things are getting serious.
In its filing to sell up to 75 million shares of stock, GameStop noted that between February 4 and June 6, the closing price of its stock has ranged between USD10.01 and USD48.75, and daily trading volume ranged from 1.7 million shares to nearly 207 million shares.
“During such period, we did not experience any material changes in our financial condition or results of operations that would explain such price volatility or trading volume,” the company said.
Going back to January 2021, “the market price of our common stock has seen extreme price fluctuations that do not appear to be based on the underlying fundamentals of our business or results of operations.” GameStop shares closed last Friday down 39.4 per cent at USD28.22.
