Yahoo Finance GameStop Shares Soar as Keith Gill Schedules YouTube Return
(Bloomberg) -- Keith Gill, whose Roaring Kitty online moniker has sent GameStop Corp. shares surging in the past week, sparked another rally in the video-game retailer after a YouTube post said he’d return to the platform Friday for the first time in three years.
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GameStop shares rose 47% to $46.55, triggering multiple volatility halts. The stock is up 76% in two days and has soared 167% since Gill tweeted a cryptic meme on May 12. GameStop continued its rapid ascent in postmarket trading Thursday, jumping as much as 45% to hit a high of $67.50.
While Gill’s YouTube post contained no information on what the investor planned to discuss or whether he’d disclose new positions, his anticipated return sparked further speculation that Gill is bullish on GameStop. The post says his live stream will kick off at 12 p.m. New York time.
Within minutes of the posting, more than 10,000 YouTube users signaled an interest in being notified when the stream starts. The video’s live chat featured hundreds of comments. GameStop’s ticker, GME, quickly started trending on the popular StockTwits chat room and Reddit’s WallStreetBets forum.
The latest surge adds to Gill’s haul from positions disclosed on his Reddit account June 2. His stake of 120,000 calls at $20 expiring June 21 is now worth some $325 million, giving him an unrealized profit of about $260 million, according to data compiled by Bloomberg.
Gill’s unverified holdings of 5 million GameStop shares that he paid roughly $106 million for are now worth almost $120 million more than that.
Thursday’s rally again burned investors betting that GameStop’s rally would implode. Short sellers endured almost $1 billion in mark-to-market losses, according to data analytics firm S3 Parners. The bearish investors are now down some $1.36 billion this month, the firm’s data show.
While options activity on GameStop was elevated Thursday relative to recent weeks, the ratio of bullish to bearish bets was not indicative of day traders piling into call options in an attempt to drive the stock price higher.
In past bouts of meme-driven rallies, traders have flooded into out-of-the-money calls, forcing dealers to buy the underlying shares as a hedge. Those purchases added more upward pressure on the share price, pushing some derivatives into the money and sparking more options buying in what’s known on Wall Street as a gamma squeeze.
Call contracts that expire June 14 with a strike price of $128 — a level that’s nearly three times higher than the stock’s Friday closing price — were among the most traded Thursday, with buyers appearing to outstrip sellers, traders said.
Fresh Disclaimer
The details of the scheduled stream also included a disclaimer that had not appeared in the account’s prior YouTube posts, bearing a warning that the video would be opinion-based, along with familiar equity legalese saying past performance is not indicative of future results.
“This YouTube channel is not under any obligation to update or correct any information provided in these videos,” the disclaimer read in part. “Statements and opinions are subject to change without notice. No compensation is received by this YouTube channel for the opinions expressed.”
The new disclaimer comes in the wake of a Wall Street Journal report on Monday that online brokerage E*Trade was considering banning Gill from its platform amid concerns over whether his social media actions could amount to market manipulation.
Jerry Selvers, a securities lawyer at Pashman Stein Walder Hayden, said the language was probably because the YouTube account’s owner is concerned about such accusations.
“The motivation is likely to try and prevent either the SEC, state regulators or even individuals to come after him,” Selvers, who previously worked at the US Securities and Exchange Commission, said.
Earlier this week, Gill, who became an icon for cooped-up retail traders at the height of the pandemic, shared a screenshot that appeared to show his owning a $116 million position in GameStop. A position that large would make Gill one of the company’s five biggest investors and is more than six times the number of shares his account showed in an April 2021 post, the last time it was active on Reddit, when accounting for a four-for-one stock split.
Gill, who is known by his X and YouTube handle Roaring Kitty as well as DeepF—-ingValue handle on Reddit Inc., profited handsomely from investing in the beleaguered video-game retailer through 2020 and 2021.
His activity across social media, beginning with a May 12 post with an image of a video gamer leaning in, fueled anticipation he’d make a swift return to the market and drove shares to more than triple in days. The Reddit post less than a month later sent shares even higher with Gill also posting an image of a reverse card from the game UNO that indicates a player is changing the card-pickup direction.
--With assistance from Bre Bradham and Jessica Menton.
(Updates with postmarket trading.)
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