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GameStop up 35% amid Roaring Kitty's YouTube return

Published 07/06/2024, 09:56
© Reuters
GME
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Shares in GameStop (NYSE: NYSE:GME) extended their rapid rally in Friday's premarket after Keith Gill, known by his online moniker "Roaring Kitty," sent the stock surging more than 47% the previous day by announcing his return to YouTube for the first time in three years.

The retailer’s stock soared by an additional 34.3% in the market pre-open. Should GME hold on to these gains, its market cap would surge to $19 billion at the opening bell.

GME’s near 50% surge on Thursday triggered multiple volatility halts. The stock has surged 76% in two days and climbed 167% since Gill tweeted a cryptic meme on May 12.

Gill’s YouTube announcement, which lacked specifics about what he would discuss or any new positions, nonetheless fueled speculation that he remains bullish on the popular meme stock.

His live stream is scheduled to start at 12 p.m. New York time. Within minutes of the post, over 10,000 YouTube users expressed interest in being notified when the stream begins, and the live chat was flooded with hundreds of comments. GameStop's ticker, GME, quickly began trending on StockTwits and Reddit (NYSE:RDDT)'s WallStreetBets forum.

The latest surge in GameStop's stock adds to Gill's impressive gains from positions he disclosed on Reddit on June 2. His holding of 120,000 call options at $20, expiring on June 21, is now valued at approximately $325 million, yielding an unrealized profit of about $260 million, according to Bloomberg data.

Moreover, Gill's unverified holdings of 5 million GameStop shares, which he acquired for around $106 million, have increased in value by nearly $120 million.

Thursday's rally dealt a significant blow to short sellers, who have been betting on GameStop's decline. According to data analytics firm S3 Partners, short sellers faced nearly $1 billion in mark-to-market losses, bringing their total losses for the month to approximately $1.36 billion.

While options activity on GameStop was elevated on Thursday, the ratio of bullish to bearish bets did not suggest a significant influx of day traders attempting to drive the stock price higher through call options.

Remarkably, call contracts expiring on June 14 with a strike price of $128—nearly three times higher than GameStop's closing price on Friday—were among the most traded, with buyers appearing to outnumber sellers, traders reported.

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