By David Randall and Noel Randewich
(Reuters) – Stock influencer Keith Gill’s first livestream in three years failed to spark enough investor enthusiasm in GameStop (NYSE:) on Friday to reverse a nearly 40% slide in the retailer’s shares after it had revealed a stock sale of up to $3 billion.
On a livestream with more than 600,000 viewers, Gill, the key figure behind an eye-popping rally in the struggling company’s shares in 2021, joked about memes and interspersed his discussion of GameStop with several disclaimers.
Known on YouTube as ‘Roaring Kitty’, he warned viewers that they could ‘lose everything’ and that his ‘aggressive style of investing is almost certainly not for all of you’.
Shares of GameStop, which also reported its quarterly results four days ahead of schedule on Friday, shot up nearly 50% the day before after Gill posted about the upcoming livestream.
Volatile trading in GameStop, AMC Entertainment (NYSE:) and other stocks since Gill’s return to social media last month shows that some investors still have an appetite for risky trades in troubled companies.
“You post a few memes, you post a few screenshots, and everyone goes crazy,” Gill said during the livestream, wearing a headband and white sunglasses.
The stock closed at $28.22 after being halted several times leading up to and during the highly anticipated livestream.
Investors traded $10 billion worth of GameStop shares, more than any other stock on Wall Street except Nvidia (NASDAQ:) and Apple (NASDAQ:), according to LSEG data.
Gill also said he had confidence in GameStop’s billionaire CEO Ryan Cohen.
“I believe this man,” he said of Cohen. “It’s kind of based on feeling.”
GameStop is in the process of “tailoring” the ship and cutting costs to stabilize its existing business and “now it’s all about the transformation,” he said.
“This is what he does. He discusses the fundamentals, he likes the stocks, he makes memes, he drinks, he walks,” user SteveRogers 7 commented on Reddit after Gill’s livestream. “Do you want him to tell you to start pumping GME? That’s not going to happen, stay disappointed.’
The company previously said it would sell up to 75 million shares, but did not respond to a request for more details on the timing of the capital increase.
A spokesperson for the U.S. Securities and Exchange Commission declined to comment on whether it was reviewing the stock sale.
In 2021, Gill’s support of GameStop helped the shares rise as much as 1,600% before plummeting. He gained a cult-like following among some investors and fame among others.
Gill has helped lure a flood of retail money to the beleaguered brick-and-mortar retailer with his bullish discourse on Reddit posts and YouTube streams, where he often appeared wearing a bright red pirate bandana.
But after facing criticism from Congress and regulators for his role in the extraordinary saga, Gill disappeared, albeit much richer thanks to his GameStop investment, which at one point was worth $48 million.
His return has sent GameStop shares soaring in recent weeks after an account on X linked to Gill began posting memes on May 13 that some investors saw as a sign he was bullish on the company. After Friday’s decline, the stock continues to rise more than 50% during that time.
“Retail traders are becoming increasingly important and joining the conversation like never before. These investors now really have a seat at the table and need to be given due attention by publicly traded companies for their influence,” said Don Montanaro, president of discount brokerage. Firstrade, said.
Just last month, GameStop said it made more than $900 million by selling 45 million shares as it capitalized on the meme stock revival.
“Strike while the iron is hot. AMC was praised for using their stock price rally to clean up the balance sheet, so it’s not surprising that GameStop would take a page out of their playbook,” said Brian Jacobsen, chief economist at Annex Wealth. Management.
Theater chain AMC, another retail darling, completed a $250 million at-the-market stock sale last month amid the meme stock frenzy.
Shares of other so-called meme stocks also plunged on Friday. AMC lost 15% and headphone manufacturer Koss fell 17%.
GameStop’s quarterly results showed net sales fell from a year ago as the company struggles with customers buying video games online instead of in stores.
