GameStop Stock Falls Following Stock Sale Plan and Roaring Kitty Live Stream

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GameStop shares plunged Friday after the struggling video game retailer announced plans to sell new shares, despite efforts by “meme stock” trader Roaring Kitty to drum up support for the stock.

GameStop shares were down 40% by midafternoon, paring feverish gains since the mid-May return of Roaring Kitty — real name Keith Gill, who rose to fame in 2021 for speaking out against the loss-making company.

In a YouTube livestream Friday afternoon, Gill said he felt “a lot of the same feelings” as he did in 2021 and emphasized his support for general manager Ryan Cohen.

“Ryan Cohen and his team, that’s what people should be focusing on. . . I feel like I’ve seen enough where I think this guy might be able to do it.

GameStop has used its popularity with retail traders to strengthen its financial position through repeated stock sales and revealed plans Friday morning to sell an additional 75 million shares.

The announcement was accompanied by an earlier-than-expected release of its first-quarter financial results, which showed a 29 percent year-over-year drop in sales but a reduction in net losses of $50.5 million to $32.3 million. The figures are in the middle of the forecast range provided by the company last month.

GameStop’s core business, selling game consoles, software and collectibles, is in decline, while its retail footprint has shrunk by more than a quarter in the past five years to just a little more than 4,000 stores, mainly in the United States. Investment gains, however, have helped stem losses from struggling retail operations in recent quarters.

Last month, GameStop sold 45 million new shares, worth $933 million, after Gill re-emerged with a series of cryptic social media posts that sent the stock skyrocketing. It reported cash of $999 million in the first quarter before the new funds and its debt load is minimal. If it sold the new shares at a price of $27.90 on Friday afternoon, it would raise an additional $2.1 billion.

Screenshots released earlier this week showed that Gill had taken a position in GameStop stocks and call options worth up to $557 million, sparking speculation that he was backed by a third-party funder. He said during Friday’s live stream that there are “no other people I work with” and that GameStop is his only investment.

Even after Friday’s decline, GameStop shares are still up about 60 percent since Gill’s return in mid-May.

An image of Roaring Kitty’s E*Trade account shown during the live stream showed that her position had lost more than $200 million on Friday, but was still up almost $150 million since her initial investments .

Gill, who wore white sunglasses, a headband and several bandages, burst into laughter after his announcement that the end of the live broadcast coincided with a new daily low for the stock.

“It’s wrong to think that I’m all there,” he says. “I’m not.

Additional reporting by Gregory Meyer