GameStop (GME) shares jumped 21% on Monday after "Roaring Kitty" Keith Gill, the stocks influencer behind the 2021 retail trading frenzy, returned to Reddit with a post showing a $116 million bet on the embattled video game retailer. The stock was set to add $4.6 billion to its market value after surging as much as 75% earlier in the session. Roughly $2.7 billion worth of shares changed hands by 10:12 a.m. ET, compared with $2.3 billion in Apple (AAPL), according to LSEG data.
It was Gill's first post in three years from his Reddit account, where screenshots of his bullish GameStop trades triggered a rush of demand in 2021 for "meme stocks" - often companies with weak fundamentals that gained a cult-like following through social media hype among retail traders. The screenshot posted on Sunday showed a GameStop holding of 5 million shares, or 1.8% of its publicly available stock. Gill's last post from April 2021, titled "final update," showed a holding of 200,000 shares worth $30.9 million. Sunday's post also revealed $65.7 million worth of call options expiring on June 21 at a strike price of $20.
Market Overview:- GameStop shares jumped 21% after Keith Gill's $116 million bet.
- The stock surged as much as 75% earlier in the session.
- GameStop was the second-most traded stock on retail brokerage Fidelity.
- Keith Gill's Reddit post showed a GameStop holding of 5 million shares.
- Gill's post revealed $65.7 million worth of call options expiring on June 21.
- Fellow meme stock AMC (AMC) jumped 20%.
- GameStop is expected to post first-quarter results on June 11.
- The company warned that first-quarter net sales would drop.
- The $7 billion company grapples with slowing sales due to digital game downloads.
"Keith Gill is putting his money where his tweets are, and some investors are clearly following his lead and rekindling interest in meme stocks," said Ben Laidler, global markets strategist at digital brokerage eToro. "This is having a disproportionate share price impact given the short position in the stock combined with its relatively small market capitalization."
GameStop's surge also put short sellers on track to rack up nearly $1 billion in paper losses, according to data and analytics firm Ortex Technologies. Reddit shares jumped 6.8%, while retail trader-focused brokerage Robinhood (HOOD) gained 5%. GameStop raised $933 million by selling shares to cash in on a meme stock rally last month, when the stock doubled in value. Still, shares are nearly 50% below their May peak and down about 70% from 2021 highs.
