GameStop (GME) stocks jumped Monday after user “DeepF***ingValue” on Reddit, an account believed to be linked to individual investor Keith Gill – who sparked the meme stock rally in 2021 – posted a screenshot of screen on Reddit Sunday night that purported to show they paid nearly $175 million to build a position in the video game retailer.
Gill is also known as Roaring Kitty on X and YouTube. The user posted the screenshot on Sunday evening on Reddit’s Superstonk subreddit.
GameStop gained as much as 75% at market open after doubling at one point in premarket trading; around 10 a.m. ET, the stock was up more than 35%.
The screenshot shows holdings of 5 million GameStop shares purchased at an average price of $21.274, a position worth $115.7 million at Friday’s closing price of $23.14. GameStop shares were trading at $38 each in early trading Monday before being temporarily suspended due to volatility.
The account also appears to hold 120,000 options contracts that expire on June 21. These contracts grant the right to buy GameStop shares at $20 each, a position worth $65.7 million as of Friday’s close.
Steve Sosnick, chief strategist at Interactive Brokers, warned investors against continuing the rally.
“Is whoever controls this account doing this in your best interest or in their best interest? And, really, you should think about that because, to me, it (is) pretty obvious who that is,” Sosnick told Yahoo Finance on Monday.
“If you are chasing stocks here, you are more than likely the source of liquidity allowing whoever controls this account to sell according to your enthusiasm.”
Monday’s surge comes after GameStop rose 180% over a two-day period in mid-May following “Roaring Kitty.” posted for the first time on X, formerly Twitter, since 2021.
Last month’s gathering was of short timeas analysts warn of meme action this time it was far compared to the level of retail influx observed in 2021.
Still, GameStop benefited from the May rally. Last month, the company sold 45 million shares, generating approximately $930 million in revenue. The stock jumped 25% on the news.
Typically, investors expect the stock price of a company issuing new stock — which dilutes the value of current holdings — to decline after a stock sale.
AMC (AMC) also benefited from the meme frenzy, raising $250 million through the sale of 72.5 million shares. last month. AMC shares rose about 10% on Monday.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on @ines_ferre.
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