24hoursworld

Wall Street: GameStop shares soar 70% pre-market after Keith Gill’s reappearance

Wall Street: GameStop shares soar 70% pre-market after Keith Gill’s reappearance

The GameStop stock they shoot more than 70% before market opening this Monday after “Roaring Kitty” Keith Gill, the stock influencer behind of the 2021 retail rush, returned to Reddit with a post showing a $116 million bet on the troubled video game retailer.

About $390 million in GameStop shares had changed hands by 5:53 a.m., more than the $343 million in Wall Street favorite Nvidia, according to LSEG data.

It was the first post in three years from Gill’s Reddit account, where screenshots of his bullish trades on GameStop in 2021 triggered an avalanche of demand for “meme stocks” – often companies with weak fundamentals that gained a cult following through social media promotion.

The screenshot posted Sunday showed a GameStop holding of $5 million, or 1.8% of its publicly available shares. It also showed $65.7 million in GameStop call options, typically purchased to express a bullish view, expiring on June 21 with a strike price of $20.

GameStop: what’s behind the meteoric rise

The Reddit crowd’s favorite trader holds 5 million shares of GameStop valued at $115.7 million at Friday’s closing price, according to the account snapshot posted on Reddit’s r/SuperStonk forum.

The account also showed a position of 120,000 call options on GameStop with a strike price of $20 expiring on June 21 and which were purchased for about $5.68 each. GameStop shares closed Friday at $23.14. The post was not independently verified by CNBC.

Notably, he did not post to the infamous WallStreetBets chat room where he used to post all his trading updates at the height of the GameStop mania more than three years ago, although the username is the same one he used. Around the same time on Sunday night, Gill posted a cryptic image of a reversal card in the “Uno” game on X, which quickly garnered nearly 30,000 likes.

gamestop-forbes.jpg

Courtesy: Forbes

Gill’s first return to social media three weeks ago sparked a surprising surge in GameStop shares, more than doubling in May alone. At the time, he simply posted a picture of a man in a chair leaning forward, but that was enough to trigger a buying frenzy among amateur traders. GameStop took advantage of the May rally by raising more than $900 million in a stock sale. The investor was a former marketer for Massachusetts Mutual Life Insurance.

In 2021, through YouTube videos and Reddit posts, Gill encouraged a group of retail traders to pressure hedge funds shorting GameStop. The stock became so wild at one point that brokerages, including Robinhood, had to restrict trading in the stock as their clearing margin blew up.

The mania also led to a series of congressional hearings, featuring Gill, on broker practices and the gamification of retail. GameStop is still struggling with a transition toward online gaming away from in-store video game purchases, with investors betting that CEO Ryan Cohen will eventually reinvent the company.

Source: Ambito

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts