GameStop (GME) stock fell as much as 17% in early trading Friday after the video game retailer reported quarterly results that missed analyst estimates and announced a stock sale just hours before a highly anticipated live broadcast of “Roaring Kitty,” an alias used in the past by bullish retail investor Keith Gill.
For the first quarter, GameStop reported an adjusted loss of $0.12 per share versus an estimated loss of $0.09. Net sales fell 29% to $882 million compared to analysts’ estimates of $995.5 million. Wall Street was expecting quarterly results later this month.
The company also has deposit sell up to 75 million additional shares. Last month, GameStop sold 45 million shares, generating about $930 million in proceeds.
The announcements follow the stock’s 47% rise in the previous session, after “Roaring Kitty” scheduled a live broadcast on YouTube Friday at noon Eastern Time.
This would be Gill’s first live appearance on the channel since the investor helped spark the meme stock rally in 2021 via his bullish videos and posts about the video game retailer.
After the market closed on Thursday, “DeepF***ingValue,” a Reddit handle also previously associated with Gill, posted a screenshot purportedly showing the user’s portfolio totaling $586 million, including GameStop shares and unexercised option positions.
Earlier this week, the same user revealed a $175 million bet on GameStop. Stocks also jumped after this release.
GameStop shares have been on a roller coaster ride over the past month as Gill re-emerged on social media, prompting some calls that Gill should be investigated.
“The fact that this individual bought short call options on GameStop and then tweeted for the first time in forever – knowing full well that these folks at Reddit WallStreetBets would then drive the stock price up… It’s shady,” Loop Capital Markets manager Anthony Chukumba told Yahoo Finance on Thursday afternoon.
Earlier this week, the office of Massachusetts’ top securities regulator confirmed to Reuters that it had opened an investigation into “Roaring Kitty’s” GameStop trading.
Late Monday, following the emergence of the user over the weekend, the The Wall Street Journal reported that Executives at Morgan Stanley’s (MS) E-Trade platform were considering creating an account linked to the screenshot. GameStop shares fell about 5% the next day.
GameStop rose 180% in two days in mid-May after ‘Roaring Kitty’ posted for the first time on X, formerly Twitter, since 2021.
Last month’s rally was short-lived and analysts warned that the action this time around is a far cry from the level of retail influx seen three years ago.
Inès Ferré is…
