New York City, USA – Meme stock trader Keith Gill, also known as “Roaring Kitty,” saw GameStop’s shares drop 40% after his first livestream in three years failed to rally investors on Friday. The slump in GameStop’s stock followed the announcement by the video game retailer of a share sale to raise up to $3 billion. Despite nearly 600,000 viewers tuning in to his YouTube livestream, Gill encouraged viewers to bet on CEO Ryan Cohen and his team, while also emphasizing the risks involved and the possibility of losing everything due to his aggressive style of investing.
Gill’s livestream coincided with GameStop releasing its quarterly results four days earlier than scheduled, causing the stock to surge by 50% before his broadcast. The volatile movement in GameStop and other popular stocks on Reddit highlights the continued interest of retail traders in taking risks on struggling companies based on internet trends and nostalgia, rather than sound business judgment.
During the livestream, Gill expressed confidence in Cohen’s leadership and the company’s potential for transformation, mentioning the characteristics he believes Cohen possesses for the task. This sentiment is echoed by Gill’s previous advocacy for GameStop in 2021, which led to a significant surge in the company’s shares before they eventually dropped.
GameStop concluded trading at $28.22 following several halts ahead of and during Gill’s livestream, with investors trading a total of $10 billion worth of GameStop shares. The retailer reported net sales of $881.8 million and a net loss of $32.3 million for the first quarter, along with $1.083 billion in cash, cash equivalents, and marketable securities. Additionally, GameStop announced plans to sell up to 75 million shares to raise capital, following a previous sale of 45 million shares last month, which generated over $900 million.
The surge in retail traders’ participation in the stock market is changing the dynamics of investor influence, prompting companies to take notice of their impact. As retail traders gain a stronger voice in the market, their reactions to events like Gill’s livestream and GameStop’s financial reports can have significant effects on stock prices and market perceptions.
Overall, the recent events surrounding GameStop, Roaring Kitty, and the broader landscape of retail trading demonstrate the evolving nature of the stock market, where internet culture and individual investors have a growing role to play alongside traditional Wall Street players. As the influence of retail traders continues to expand, companies and investors alike will need to adapt to the changing dynamics of the market to navigate the new landscape successfully.