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Shares in GameStop surged as much as 75 per cent on Monday after a post on Reddit purported to show that Keith Gill, the “meme stock” investor also known as Roaring Kitty, had built a position in the struggling video game retailer that was worth $260mn by the close of trading.
The sharp rise came after Gill’s account, which goes by the name DeepFuckingValue on Reddit, posted a picture late on Sunday that appeared to show he had taken a share stake and options positions in the retailer. GameStop leapt to just over $40 a share shortly after the New York open but later eased to close at $28, up 21 per cent on the day.
The Sunday screenshot indicated Gill held 5mn shares in the company, bought at $21.27 apiece, and worth $140mn at Monday’s close. It also showed 120,000 call options, which give the holder the right to buy further shares at $20 each.
The options, which expire on June 21, were worth $120mn after Monday’s trading — and would cost the holder $240mn to exercise in full. A second screenshot shared on Reddit on Monday afternoon appeared to show paper gains of more than $85mn on Gill’s recent GameStop trades.
The day trader was at the centre of the meme-stock mania in 2021, when his social media posts encouraged millions of others to pile into the stock and squeeze out hedge funds betting on a share price decline. After a three-year silence, Gill reappeared last month on social media site X, sending GameStop shares soaring again, though the rally quickly fizzled out.
Monday’s move suggested “there’s still huge appetite [among the retail crowd] for this stock, whether healthy or not”, said Kevin Gordon, a senior investment strategist at Charles Schwab.
About 15 per cent of GameStop’s outstanding shares were on loan — a rough proxy for short interest — as of the close of play on Friday, down from just over 25 per cent at the end of May, according to data from S&P Global Market Intelligence. “In Asian and European trading hours so far today there is very slim additional borrowing taking place,” S&P Global said.
After GameStop shares leapt last month, it raised $933mn selling fresh shares. The company is due to report first-quarter results on June 11. Net sales are expected to have dropped about 25 per cent year on year, according to preliminary results announced in mid-May.
On Monday, GameStop was trading at more than 2,300 times its estimated earnings per share for the coming year, Bloomberg data showed. The company added almost $4bn to its market value in early trading.
Monday’s pre-market rally elicited hundreds of fawning tributes to Gill on social media, with one widely shared post on X describing him as “one of the greatest traders of all time”.
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