GameStop Shares Tumble, Roaring Kitty Faces $235M Loss Amid Market Scrutiny
Summary:
Roaring Kitty, also known as Keith Gill, loss $235 million as GameStop's share price fell from $46 to $26. Gill also possesses call options for 12 million GameStop shares. His announcement of a livestream caused a significant increase in GameStop's stock price. Despite having the potential to become a billionaire from his GameStop shares, Gill faces challenges. He needs $240 million to exercise his options and is under pressure from institutional stakeholders and platforms like E*trade over market manipulation concerns. GameStop had to clarify that its stock price increase was not reflective of the company's performance.
Roaring Kitty, the trader who fueled the GameStop (GME) meme stock surge, is making waves after hosting his first YouTube livestream in three years. In the stream on June 7, Roaring Kitty, also known as Keith Gill, showed his portfolio and stated that he experienced a loss of $235 million, as a result of a significant drop in GameStop shares from around $46 to roughly $26. At the time of reporting, GameStop shares are hovering around $28. Gill also disclosed that he holds call options for 12 million GameStop shares.
The livestream was announced by Roaring Kitty to his followers on YouTube on June 6, scheduling the video for the next day. The announcement led GameStop's stock price to spike from $32 to $46.55, with after-market trading reaching an impressive $61.27. According to Tradingview's snapshot of GameStop's erratic pricing pattern, the sharp changes were due to extreme market volatility and multiple trading pauses.
Using the after-market price as a benchmark, Roaring Kitty was expected to become a billionaire solely from his GameStop shares, provided the market trading level on June 7 paralleled the previous day's after-market trading.
Gill currently faces numerous hurdles. He needs $240 million in cash to exercise his call options and can't sell them due to potential market backlash. Alternatively, he could sell his GameStop shares to secure the cash for his options, but this action would likely depress the stock price.
Third-party financing could present its own issues for Gill, considering his past confrontation with Congress in 2021 after the initial GameStop stock boom. Gill maintained his belief that GameStop's price was underestimated during the congressional hearing and predicted the firm would undergo a revival.
There is also increasing pressure from institutional stakeholders and platforms like E*trade. The latter has announced considering removing Gill from its platform over market manipulation concerns. GameStop's trading was reportedly paused six times on June 7 due to extreme market volatility. GameStop was even compelled to issue a statement clarifying that the drastic increase in its stock price wasn't a reflection of the company's performance.
Published At
6/7/2024 11:53:28 PM
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