GameStop Shares surged more than 70% in premarket trading Monday after Keith “Roaring Kitty” Gill, the stock influencer behind the 2021 retail trading frenzy, returned to Reddit with a post showing he's betting $116 million on buying the struggling video game retailer.
The shares doubled in value to $46.90, with trading volume of about $1.1 billion as of 8:15 a.m. ET (12:15 GMT), second only to Wall Street darling Nvidia Corp.'s $1.6 billion, London Stock Exchange data showed.
It was the first post on Gill’s Reddit account in three years, in which he posted screenshots of his bullish GameStop trades, sparking a 2021 boom in demand for “meme stocks” — companies with typically weak fundamentals that have gained a cult following through social media hype.
A screenshot posted on Sunday showed GameStop holding 5 million shares, or 1.8% of its publicly outstanding shares. Gill's last post in April 2021, titled “Last Update,” showed he held 200,000 shares, worth $30.9 million.
Sunday's post also revealed that $65.7 million worth of call options will expire on June 21 with a strike price of $20.
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The stock ended a volatile month at $23 on Friday, up about 33% since May when Gill began sharing cryptic posts and memes from his “Roaring Kitten” account on X.com, sparking speculation about whether he would resume sharing his shares online after a trading halt.
“Keith Gill puts his money where his mouth is with his tweets and some investors are clearly following his lead with renewed interest in meme stocks,” said Ben Laidler, global market strategist at digital brokerage eToro.
“Given the stock’s short positioning and relatively small market capitalization, this has had a disproportionate impact on the share price.”
GameStop ranked No. 1 on investor-focused social media platform stocktwits.com, indicating an increase in discussion among individual traders. Fellow meme stock AMC rose 26%, while Tupperware, SunPower Corp and U.S.-listed BlackBerry rose between 6% and 13%.
Monday's surge also left GameStop short sellers facing nearly $1 billion in paper losses, according to data and analytics firm Ortex Technologies.
Reuters could not verify the screenshot, and Gill did not respond to requests for comment on Reddit or by email.
Reddit shares rose 5.6%, while Robinhood, a brokerage focused on retail traders, rose 3.3%.
Last month, GameStop made $933 million by selling shares and capitalizing on the meme stock rally.
The $7 billion company has been grappling with slowing sales as its core business of selling new and used video game discs has been hit by consumers shifting to downloading games digitally or streaming them.
The company is expected to report first-quarter results on June 11.
The company warned in May that its first-quarter net sales would fall to between $872 million and $892 million from $1.24 billion a year earlier.
(Reporting by Medha Singh and Amanda Cooper; Editing by Varun HK and Devika Syamnath)
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