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GameStop Plummets Nearly 40% As ‘Roaring Kitty’ Struggles To Ignite Interest

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Stock influencer Keith Gill’s first livestream in three years failed to generate sufficient investor enthusiasm in GameStop on Friday, resulting in a nearly 40% decline in the shopping mall retailer’s stock following its announcement of a share sale to raise up to $3 billion.

During a livestream that attracted over 600,000 viewers, Gill, a key figure in the dramatic 2021 rally of GameStop’s stock, joked about memes and included various disclaimers in his discussion of the company. Known on YouTube as “Roaring Kitty,” he cautioned viewers about the risks, warning they could “lose it all” and that his “aggressive style of investing is almost certainly not suitable for you all.”

Despite GameStop reporting its quarterly results four days early on Friday, the stock surged nearly 50% the day before after Gill announced his upcoming livestream. However, the volatility in trading GameStop, AMC Entertainment, and other stocks since Gill’s return to social media last month indicates some investors still have an appetite for risky trades on struggling companies.

GameStop’s stock closed at $28.22 after being halted multiple times ahead of and during the anticipated livestream. According to LSEG data, investors traded $10 billion worth of GameStop shares, surpassing all other stocks on Wall Street except Nvidia and Apple.

Gill expressed confidence in GameStop’s billionaire CEO Ryan Cohen, stating the company is “right-sizing” the ship, cutting costs to stabilize the legacy business, and focusing on transformation. Although the company announced it would sell up to 75 million shares, it did not provide details on the timing of the capital raise. A spokesperson for the U.S. Securities and Exchange Commission declined to comment on whether it was reviewing the share sale.

In 2021, Gill’s promotion of GameStop led to a staggering 1,600% rally in its shares before they plummeted. He gained a cult-like following among some investors and notoriety among others. His bullish case on Reddit posts and YouTube streams, where he often wore a bright red pirate bandana, attracted significant retail cash to the struggling brick-and-mortar retailer.

Following congressional and regulatory scrutiny for his role in the extraordinary saga, Gill disappeared, although he became much richer thanks to his GameStop investment, which at one point reached $48 million in value. His return has recently sent GameStop shares soaring after an account linked to Gill on X began posting memes on May 13, which some investors took as a bullish sign. Despite Friday’s drop, the stock remains up more than 50% over that period.

Last month, GameStop announced it had raised over $900 million by selling 45 million shares, capitalizing on the meme-stocks rally revival. Similarly, theater chain AMC, another retail favorite, completed a $250 million “at-the-market” share sale during the meme-stock craze last month. Shares of other so-called meme stocks also fell on Friday, with AMC dropping 15% and headphone maker Koss KOSS.O declining 17%.

GameStop’s quarterly results revealed a decline in net sales compared to the previous year, as the company struggles with customers increasingly buying video games online rather than in stores.

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