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GameStop’s Volatility Soars After Roaring Kitty Livestream

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Gamestop's Volatility Soars After Roaring Kitty Livestream

GameStop (GME) experienced a significant surge in volatility following a livestream by Keith Gill, popularly known as ‘Roaring Kitty,’ on YouTube. Gill, a key figure in the meme stock trading frenzy, saw GME plummet 40% by the end of his livestream on Friday, which attracted hundreds of thousands of viewers.

The livestream, lasting about 50 minutes, triggered multiple halts in GME trading on the New York Stock Exchange (NYSE). Gill, in a playful tone, appeared on screen 26 minutes late, humorously dressed in bandages and a sling to reflect the day’s performance of the stock.

During the stream, Gill provided insights into his trading, showcasing his portfolio which included 5,000 shares of GME purchased at $21.274 and 120,000 June 21 $20 calls. Despite displaying a total gain of $146 million, Gill faced a daily loss of $163 million, emphasizing the speculative nature of his investment.

Gill vehemently denied any collaboration or backing from hedge funds or other market players, asserting that his positions were solely his own. He also addressed recent rumors surrounding E*TRADE potentially removing his profile from the platform, jokingly using HTML to ‘remove’ E*TRADE’s logo during the stream.

GameStop’s unexpected early release of its first-quarter earnings further fueled market volatility, with the company reporting a drop in net sales and a net loss of $32 million. Additionally, GameStop announced plans to sell up to 75 million shares of common stock, aiming to raise capital through the offering.

In light of the earnings data, Gill expressed support for CEO Ryan Cohen‘s management strategy and highlighted GameStop’s transition away from its legacy retail business. Despite facing losses during the livestream, Gill remained positive about GME’s future prospects, emphasizing the inherent risks involved in his aggressive investing style.

Following the events, GameStop stock closed the day with a 39.33% decline, with trading on NYSE being halted 17 times. Despite the sharp drop, GME had experienced a notable surge of over 30% overnight prior to the earnings and offering announcements.

Shares of GameStop had soared 47.5% on Thursday after Gill’s livestream announcement, with the stock ending the week up 22%. GME had shown substantial growth throughout the year, rallying 61.1% prior to Friday’s downturn and registering a 165% increase in 2024 before the recent decline.

Notable names such as Frontier Airlines and analyst Harrison Miller also made appearances in relation to the GameStop saga, adding to the intrigue surrounding the market developments.

Rachel Adams

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