The stock market influencer behind the so-called meme stock frenzy of 2021 has triggered a new surge in shares of GameStop, the struggling U.S. video game retailer.
Keith Gill, who goes by the name Roaring Kitty online, revealed a $116m (£90.8m) position in GameStop on Sunday.
Gill told his followers that he controlled 1.8% of GameStop’s available shares – a stake of five million shares – as well as call options that gave him the right to buy more later this month.
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A return to his Reddit account last month for the first time in three years was then credited with a renewed run on GameStop and other out-of-favor stocks.
GameStop’s market value doubled in just three weeks.
The retailer’s board profited from the renewed interest by raising more than $900 million in a subsequent share sale.
GameStop shares added $4.6 billion to its market value after rising as much as 75% in Monday morning trading.
They later closed about 30% higher.
Keith Gill is shown testifying remotely to a Congressional committee in February 2021. Photo: AP
LSEG data showed that more GameStop shares changed hands than Apple shares in the first 42 minutes of official trading.
They stood at £30 per share after Friday’s close at $23.
Gill’s GameStop trades gave rise to a wave of demand for meme stocks in 2021.
It saw hedge fund positions rack up big losses as investors bought stocks with weak fundamentals such as GameStop and movie theater chain AMC.
They have gained a cult following through accounts on Reddit and elsewhere.
But the demonstrations faded as regulators and politicians denounced the activity and the companies’ performances did not match their high valuations.
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In the case of GameStop, its key numbers continue to be hampered by difficulties associated with the transition to online gaming.
Its main business continues to be the sale of new and used video game discs.
The company warned last month about a drop in first-quarter net sales compared to the same period a year ago.
Nigel Green, chief executive of asset management and advisory firm deVere Group, urged investors to be cautious after the renewed interest, but added: “These super-fast, super-high, attention-grabbing numbers are likely to attract another huge wave of interest and , therefore, , capitals.
“I wouldn’t be surprised if stocks were worth $100 billion by the end of Monday due to the frenzy.”
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