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 a few hours before a highly anticipated livestream from “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, bringing in approximately $930 million in revenue.
The announcements came on the heels of rising stocks 47% increase during 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 Reddit WallStreetBets folks 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 transactions.
Late Monday, following the emergence of the user over the weekend, the The Wall Street Journal reported that executives of Morgan Stanley (M.S.) The E-Trade platform was 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 gathering was of short timeand analysts have warned that the stock this time around is far compared to the level of retail flows observed three years ago.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on @ines_ferre.
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