By David Randall and Sruthi Shankar
(Reuters) -GameStop stock influencer Keith Gill, known as “Roaring Kitty,” held his first livestream in three years on Friday as the videogame retailer’s shares dropped around 37% in volatile trading after it announced a share sale to raise up to $3 billion.
Shares of GameStop, which also reported its quarterly results four days ahead of schedule on Friday, shot up nearly 50% the day before after Gill, the key figure behind an eye-popping rally in the struggling company’s stock in 2021, posted on YouTube about the upcoming livestream.
“You post a couple of memes, you post a couple of screenshots, and everyone loses their minds,” Gill said on the livestream, wearing a headband and white sunglasses.
Less than half an hour in, the Youtube livestream had more than 600,000 viewers.
Gill interspersed his discussion of GameStop with various disclaimers, telling viewers they could “lose it all” and that his “aggressive style of investing, it is almost certainly not suitable for you all.”
Shares of GameStop were halted several times in Friday’s session, including during the livestream. The stock was last trading down 37% at $29.20.
Investors had exchanged over $8 billion worth of GameStop shares as of early afternoon, more than any other stock on Wall Street, except Nvidia, according to LSEG data.
Gill also said he was confident in GameStop billionaire CEO Ryan Cohen.
“I believe this guy,” he said about Cohen. “It’s kind of based on feeling.”
GameStop is “right-sizing” the ship and cutting costs to stabilize the legacy business and “now it’s all about the transformation,” he said.
The company earlier said it would sell up to 75 million shares, but did not respond to a request for more details on the timing of the capital raise and the reason for the early release of its earnings report.
“There’s an old saying: feed the ducks while they’re quacking and certainly the ducks are quacking very loudly for GME right now,” said Steve Sosnick, chief market analyst at Interactive Brokers.
“That’s part of the reason why the company pushed its earnings date forward, because there were rules against selling stock ahead of a major corporate announcement like earnings.”
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 championing of GameStop helped its shares rally by as much as 1,600% before they tumbled. He won a cult-like following among some investors and notoriety with others.
Gill has helped attract a flood of retail cash to the beleaguered bricks-and-mortar retailer with his bullish case on Reddit posts and YouTube streams where he often appeared wearing a bright red pirate bandana.
But after drawing congressional and regulatory scrutiny for his role in the extraordinary saga, Gill quickly disappeared, albeit much richer thanks to his GameStop investment, which at one point touched $48 million in value.
His return has sent GameStop shares soaring in recent weeks after an account on X linked to Gill on May 13 began posting memes that some investors viewed as a sign of him being bullish on the company.
Just last month, GameStop said it made more than $900 million by selling 45 million shares as it took advantage of the revival meme-stocks rally.
“Strike while the iron is hot. AMC was applauded for making use of their stock price surge to clean up its balance sheet, so it’s not surprising that GameStop would take a page from their playbook,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Theater chain AMC Entertainment, also a retail darling, completed a $250 million “at-the-market” share saleduring the meme-stock craze last month.
(Reporting by David Randall and Chuck Mikolajczak in New York; Sruthi Shankar, Shristi Achar A, Jaspreet Singh and Johann M Cherian in Bengaluru; additional reporting by Christine Prentice in New YorkEditing by Ira Iosebashvili, David Gregorio, Arun Koyyur and Marguerita Choy)
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